Ousted Public Works boss and current federal prisoner Mohammed Nuru had his flaws, but he did excel at following the money. And, in the case of the homeless work program Downtown Streets, which disseminates yellow-clad currently and formerly unhoused people throughout San Francisco to clean and beautify their surroundings, he found himself at a loss.
“I remember Mohammed, of all people, was really negative about this program,” recalled a former colleague. Nuru would muse incredulously to his coworkers about the Downtown Streets Team’s business model: “They don’t pay them anything? They give them gift cards? This is bullshit.”
In a lengthier and less profane manner, the city of San Francisco has spent some 18 months attempting to determine if that’s the case. The outcome of the city’s long-running audit and investigation could ding Downtown Streets for hundreds of thousands of dollars — and, even more damagingly for an outfit doing work in 20 California cities, declare its volunteer-based business model to be unlawful.
“Our preliminary findings are that DST [Downtown Streets Team] owes a total of $475,529.98 in health care expenditures to 203 current and former workers, and $62,975.92 in penalties to the City,” stated a September 2022 missive from the city’s Office of Labor Standards and Enforcement to Downtown Streets’ Menlo Park-based attorney. “You’ll notice that $394,506.67 of the restitution amount is for the group of workers DST contends are ‘volunteers.’ The City Attorney’s Office reviewed all the information provided by DST, including the caselaw, and supports OLSE’s position that the Team Members are employees, not volunteers.”
Over the ensuing nine months, Downtown Streets and city officials have continued to meet and hash out numbers, and these dollar totals have been altered. But not necessarily lowered.
When asked if Downtown Streets is on the hook for more or less than the $538,506 tallied in September, chief programming officer Chris Richardson candidly states, “the short answer is, we just don’t know.” Patrick Mulligan, the director of the city’s Office of Labor Standards and Enforcement, said he couldn’t go into details on an active case, but did concede that the dollar figures remain “significant” and “substantial.”
Add another descriptor to that: Existential. Downtown Streets has been making its case in City Hall to supervisors and members of the mayor’s office. It argues that, separate and apart from a looming six-figure disgorgement, being made to abandon a business model reliant on largely unpaid labor will be its death knell.
If the San Francisco labor office’s “preliminary position that Team Members are employees is sustained, DST will be forced to discontinue services in SF and all other communities and enter some form of insolvency,” reads a six-page “position statement” crafted in the wake of the city’s investigation.
While members of the Downtown Streets Team are lightly compensated, the organization isn’t: A perusal of city numbers reveals Downtown Streets has received at least $2.17 million in San Francisco contracts since 2017. A $1.78 million state grant just came through to fund Downtown Streets in Alameda County and others. Downtown Streets’ most recent tax filing denotes $8.34 million in government grants, as well as 1,034 volunteers (compared to 120 employees).
Paola Laverde, a spokeswoman for the California Department of Labor Standards Enforcement, said that Downtown Streets is also presently facing a pair of claims at the state level — “but the claims are both in the adjudication process and [we] cannot comment on them until the process is finalized.”
In 2019, following worker complaints, a Downtown Streets internal probe “substantiated a culture of drinking and inappropriate joking in the workplace.” Downtown Streets in 2021 settled a wage theft suit for $170,000.
Whether one bemoans the potential demise of an outfit that, in its own words, fights “homelessness through the dignity of work and the power of community” or questions the funneling of millions of dollars of government money to an outfit founded on the explicit model of not paying wages to its workforce isn’t a simple dichotomy. It could be both. It’s complicated.
So, it turns out, is the definition of a “volunteer.”
Unlike the black-and-green clad workers of Urban Alchemy, who line the streets of Civic Center and the Tenderloin in numbers harking to a conquering army, Downtown Streets teams are fewer in number and harder to find.
But their trademark goldenrod-colored shirts do give them away. On Friday, Ernest James Little, 59, was gathering wrappers, tissues and other trash near Civic Center BART.
“My name’s Little, but I’m not little,” he said, rising up to reveal his six-foot stature. “I love Downtown,” he says of his not-quite employer of two years. “They help me very much.”
Little saw the yellow-clad Downtown Streets Team Members at a time in his life when he was “bad off. I was not that level of bad off” — he gestures low to the ground with his hands — “but bad.”
Well, that was then: “People look at you, and at least you are picking up trash.” The work has been good for Little. But there’s more to it than that: Every four-hour shift he works earns him a $25 Target gift card from Downtown Streets. “They got me a social worker, they helped me get my finances straight to pay my bills — I’m on SSI.”
Little is an evangelist. This program appears to be working for him. But it clearly isn’t working for the Office of Labor Standards and Employment. Or for several labor attorneys contacted by Mission Local, who felt Downtown Streets, an outfit with more than 1,000 reported volunteers, was straining the legal definition of a volunteer.
“Taking my labor lawyer hat off, it’s a wonderful thing,” says Zoe Palitz. But Palitz is a labor lawyer, at Altshuler Berzon LLP. And the fact that Downtown Streets hands gift cards to its volunteers — and, critically, bases remuneration levels on participation levels — set off red flags for her.
“If I volunteer for Habitat for Humanity, I’m not getting a bigger lunch for more hours worked,” she explained. “If you’re paying people on these gift cards based on how much they work, that starts to feel like an end run around paying wages.”
Adds Veena Dubal, a labor law professor at the University of California, Irvine, “It seems to me that if these are people who are doing quote-unquote volunteer services to get basic life necessities they rely on, then this is not volunteer work.”
Downtown Streets, Palitz notes, finds itself in a legal and moral Catch-22. The more it gives workers via gift cards and non-wage compensation, the more it appears to be evading wage laws and the taxes and worker benefits tied to them. And the less it gives workers, the more it opens itself up to charges of exploitation.
But this is the nature of a business model based on minimally compensated labor.
Richardson, Downtown Streets’ chief program officer, has been in the fold for nearly 14 years. In that time, “I’ve seen thousands of people who would not be able to be served by any other model.”
Many of the people on the street teams, he says, are not only unable to hold down a regular job, they may not possess the requisite documents to do so. “This is not employment,” he says. “It’s pre-employment. We do not try to keep folks volunteering with us. Our goal is to move them on to bigger and better things.”
Richardson said that Downtown Streets is “defending our [business] model as it stands” but “also exploring other options.”
That seems wise: His greatest fear is that a negative ruling by San Francisco’s labor office could induce a cascading effect up and down the state and lead to Downtown Streets’ present business model being declared incompatible with California law — and the implosion of the nonprofit.
“I’ve been on pins and needles for 18 months now. It has been an absolute nightmare,” he says. “To be honest with you, I’m shaking in my boots.”
Others are more sanguine. On the same day that Little was picking up rubbish around Civic Center BART for a gift card, Mission Local spotted a similarly dressed worker tidying up a block and a half from 16th Street Station. Except this woman was a paid Public Works employee.
The Laborers Union has long accused San Francisco department heads of knowingly contracting out union jobs to lower-paid non-union workers — or, in the case of Downtown Streets, minimally paid workers. In doing so, the city appears to be doing an end run of its own, around prevailing wage rules.
“We’ve warned the city for years about duplicating union work with unscrupulous nonprofits, trying to save a buck by violating our collective bargaining agreements … while avoiding prevailing wage requirements for contracts by calling them ‘grants,’” wrote Ramon Hernandez, the business manager for the Laborers’ Union Local 261.
“Our unhoused residents deserve so much better than exploitation and a cheap gift card.”
Hernandez’s union sued the city last yer, claiming Nuru was the architect of a multi-million dollar grift, and retaliated against Local 261 laborers when they called him out on it.
And yet, when it comes to Downtown Streets, they’re on the same page. San Francisco, like the definition of a “volunteer,” remains complicated.
“Ultimately,” says a former Public Works colleague, “Mohammed’s insight was kinda right.”
Additional reporting by Lydia Chávez and Will Jarrett.
I have worked there for seven years. I had nothing I was robbed of 90% of my forty thousand in Pell grants and national loan school supplies and clothes from ccsf by neighbors. DTST gave me a gift card stipend job for Five dollars an hour to go to Safeway Trader Joe’s Target and Walgreens. Because of the Labor investigation we are supposed to say volunteer and not job. Really that is hogwash. We worked hard, every morning at seven o’clock. We picked up all the trash around Market, City Hall, Yerba Buena and Haight Asbury. For years I had a yellow shirt. I had to work constantly because I was never promoted. They could say anything bad about you. I had to buy my own brooms, and gloves and wash my clothes everyday. This was not volunteer. It was work. I felt worthwhile. Had a lot of trouble with SSI over the years and kept having to pay that program thousands after getting run over by a city bus. Years they didn’t pay me. After losing everything from City College I was beyond Greatful but I have a lot of education. There have been a lot of young people in the office making $50,000.00 to $100,000.00 a year. I tried so hard to keep the job. I did everything I could. I had no choice. All that education and it wasn’t doing a lot for me. The young people in the office move on and new ones replace them. The million dollar grants are mainly spent on the social workers. The rest trickles out to starving impoverished poor people learning to work. Social workers get you housing. Go to bat for you, write letters, go with people to legal aid, food stamps job fares and picnics and also legal aid. They really help but the grants are mainly spent on the office leaders. We can’t get coffee or supplies half the time. I have spent my own money. Good people quit because they felt overworked and exploited. A couple of small black guys died one defending a store manager at a robbery and the other of cancer and starvation. We are supposed to say volunteer. And now I will probably get retaliation. But this pack of lies has been rough at times. I am glad questions are being asked.
The article begins with a reference to a convicted felon, who was found guilty of using public service as a means for personal gain.
Full disclosure: I am a donor to Downtown Streets Team (DST), and my spouse is on DST’s staff. As such, I know more than most about what they do and how they do it.
It was so disappointing to see this article ask many legitimate questions, with seemingly no effort made to answer them. Because in those answers lies the value of what DST provides.
Regarding the equivalency between DST and union work as alluded to in the article… the second question on a union job application, right after applicant’s name, is address. People experiencing homelessness have no address and often no driver’s license, and many have no reliable way to contact them. The DST volunteers may or may not show up for their volunteer shifts in the organization’s Streets Team Volunteers program…. Is that acceptable for union work? They may get turned away from their shift for reasons of sobriety, but encouraged to return when they are sober, a pattern that may repeat itself several times before it gets better. Does that fit a more conventional employment model? Not to forget the DST case managers and employment specialists, who come alongside them to comfort, support, guide, and often take on administrative life tasks with them, like driving a Team Member to the DMV, because they have no other means of transportation. “Team Member” is how DST refers to those it serves (not client, not “homeless person”, but Team Member).
DST’s pre-employment services meets those experiencing homelessness with an empathy and a hope to rebuild their lives at a speed that invites them to create habits and disciplines that can often feel like overwhelming barriers to those who find themselves in this type of need.
The less than subtle accusation that Team Members don’t get much but the organization gets millions? The grant highlighted in the article covers many municipalities, not just San Francisco. The funding helps provide support services for hundreds of Team Members across Northern and Central California every day. There is no mention that these grant applications required DST to provide the awarding government agencies a detailed description of their volunteer model, as well as the cost structure of the organization. An organization where leadership and case managers’ salaries are regularly less than half of what could be made elsewhere. There is no one getting rich from this work, and to even imply as much is disrespectful to the dedication of the team doing the hard work that most of us would rather not. From the article, it doesn’t appear questions of cost structure were even asked.
The notion that DST somehow wants to keep Team Members locked into the pre-employment model for monetary gain? The article does not even mention Streets Team Enterprises, the division of DST that Team Members can graduate into, once the many personal barriers to employment are overcome. In this program, additional training and full-time employment opportunities are provided.
Would it be great to able to provide Team Members more in terms of compensation? Of course, if the resources could be found. DST is a not-for-profit organization funded through grants and donations. The City has every right to understand how its money is being used. To penalize an organization that is doing exactly what it said it was going to do when it asked for the grant? How can that make sense? If the City now decides the DST model needs to change for funded programs…. also their prerogative, but shouldn’t this be done in a collaborative manner that allows for the continued support of those served?
Like the problem DST is trying to address, the answer on how best to serve is likely complex as well. Having personally met DST Team Members, the case managers, and the leadership; seeing the community and dignity that is created, it makes my heart sad that we would so easily create a perception that they are anything other than the best of us.
DST is not a perfect organization; it has needed to change and evolve. It does not need to have a model that is locked in stone. But rather than thinly veiled accusations like those presented in the article, couldn’t we stand in support with groups like DST who are willing to work on the things many of us would rather ignore? Collaborating on how best to improve? Rather than opening and closing an article referencing a convicted felon, who was found guilty of using public service as a means for personal gain.
Well said TF! Why are we focusing on an organization that not only supports those that the rest of society; ignores, steps over, curses under their breath, and blames (unhoused) for everything wrong in our city. This is a much bigger and complex issue that really starts at the highest levels of our city leadership. I find it ironic that one city agency is punishing a non-profit for what another city agency has contracted them to do for years. Were all the city officials that ignorant when contracting with Downtown Streets? And from what I understand the city has done so for years and they obviously liked the work they were doing or would not have renewed the contracts. This really sends a mixed message to all of us who vote and pay our taxes. For those that question the validity of this non-profit? (this author included) I went to their website and was surprised to see that they actually post their data and impact. Before you all jump and make uninformed comments about this organization I ask that you do your research.
As for Nuru, well the justice system did their job and put him where he belongs. It is ironic that this outlet needed to use a convicted felon to validate their claims. Is it coincidental that Nuru as the head of DPW that gave Lena Miller (Hunters Point Families) now CEO of Urban Alchemy their first contract doing the same type of work? Urban Alchemy employs formerly incarcerated people straight out of prison (not all but i would say the majority) at least from those I have spoken with. These people go from standing on a prison yard protecting their turf to now doing the same thing on our streets. Reinforcing their incarcerated identity and doing everything to keep Urban Alchemy’s contracts in place. The city seems happy to fund them. I also did some research and found that Urban Alchemy is substantially funded by the city to the tune of multi-millon dollar contracts yearly. Have you read the articles about them??? They are a google search away people. I was shocked. Again, educate yourselves. I would ask, how many unhoused people are on the Urban Alchemy’s payroll? Yes they don’t give them gift cards however if the city provided equal equity to Downtown Streets I am sure they would pay the same wages.
We also need to take into account that the unhoused population in many cases can not work or earn an income above a certain threshold. If they do they would loose their benefits, SSI, SSDI, medical, access to housing subsidies etc. It is my understanding after looking at their website and YouTube videos that these gift cards are supporting them to just survive and by their own accounts, Downtown Streets has saved lives.
As for the labor unions, which I support, I am surprised that they were even given a voice in this article. Fact is, they are not hiring unhoused workers nor do they want to do this work. If so, let’s get the labor unions out on the streets cleaning my community please and Thank You. Just another group being a part of the problem and not the solution.
Our unhoused community members need support. They need our non-profits like Downtown Streets to provide them services, case management, and in their case, a gift card to get just the basics we all seem to take for granted. I would guess that if they could “get a job” they would however put yourselves in their shoes. Could you go to work everyday if you didn’t have a place to sleep, shower, keep your belongings, eat, wash your clothes etc? I know I would not be able too.
An article like this does what for our unhoused? It takes away another avenue for them to get support magnifying the complex issue that no one really seems willing to think out side the box and solve. Kuddos to ALL the Downtown Streets staff, you are doing Gods work. One thing this article did do is make me new donor and supporter so, Thank You Joe, I look forward to your next piece, maybe you will point me in the direction of another great organization.
Last time I visited SF for a convention there was poop on the sidewalk when I went to the convention, still there when I returned to the hotel. I was warned by the concierge and the bellkeep not to keep anything in our car, even in the garage. Our convention isn’t coming back… So ironic that instead of fixing these issues, the city is removing the organization trying to fix one of them. Wouldn’t those lawyers time be better spent pursuing charges against fentanyl dealers and theft rings?
Did you read the article?
Most important pieces to highlight to actually provide context:
1) As the article states, the more $$ that’s give the more it goes against what IRS allows as a stipend for volunteers. But I argue that this isn’t because of a business model that relies on underpaying people… I argue that this is because of a broken system. I’ll explain in my next points.
2) Employers won’t actually hire these folks. With all of the “Now Hiring” signs we’ve seen in windows, employers still won’t put up with the no call no shows, coming in late, etc. that DST accounts for and is lenient around. This has helped people get conditioned to a work environment in a space that supports and coaches around it. Being an employer, with a payroll, can’t support a model like this.
3) The is the most important point – a lot of people who actually would like to work aren’t able to without losing their SSI or benefits. After all the hoops they had to jump through to get them in the first place, they are petrified at losing one of the few dependable things they’ve had in their lives. It’s a paradox – everyone is yelling to just “hire” them or make them employees… but if that was to happen, they wouldn’t want it in the first place. Yes, you can point to similar models that do that (urban alchemy, etc.) but that’s for the demographic of people that *are* looking for work and aren’t scared of losing their benefits. Those people would’ve been ok w/ getting any other job in the neighborhood and wouldn’t need what DST *or* urban alchemy were offering.
Look into the missing street sheet paper money.
The volunteers have a hard time receiving their money when we pay them via Vimeo or Cash app .
It goes into a bucket and the volunteers can’t keep track.
It’s sad.
Wonderful reporting as usual for these journalists, but follow up question, what is the yearly funding for DST [Downtown Streets Team] from SF, and what are the salaries for the top 5 employees? Will reserve further comments until questions are answered?
“Complicated” is an oft misused descriptor, too.
It’s incredibly annoying to see this. Why don’t we audit money earmarked for homeless programs to see how much of that money actually trickles down to the homeless person’s wallet.
California law is very simple: you work, you get paid. You receive your hourly wages, breaks and overtime. You don’t get paid, the employer will owe you penalties and back pay. The City needs to pay people fairly and legally; we should not be exploiting labor without fair compensation.
Although Nuru may have been right about workers getting paid in gift cards being BS, perhaps he was just mad that someone else was being allowed to run a scam that he was not benefitting from while being a part of the work of DPW in cleaning up the city. If a non-profit exploiting current and former homeless workers could keep the streets clean, then his value might go down in the city.
I would much rather have our unhoused neighbors using their spare time to clean up their neighborhoods, and using their time productively as volunteers, rather than the opposite – using drugs and trashing the streets and sidewalks instead. I myself voluntarily clean our neighborhood streets and sidewalks, and if someone wanted to give me a gift card for my efforts – which of course, no one does! – I would not be complaining that I wasn’t being paid the wages of a skilled union worker for my efforts. Nuru is a crook and his opinion is worth zero. These lawyers are being paid handsomely to effectively destroy a program that is helping thousands of unfortunate individuals get their lives back on track, by giving them an alternative to smoking fentanyl and trashing the city. In addition, by giving the volunteers Target gift cards, they will be less inclined to shoplift their necessities!
Arbeit Macht Frei.
While I understand the concern from the labor lawyers, the union side drives me crazy. If only members of Local 261 were allowed to pick up trash in SF, and no other people could do this for any type of gifted compensation, our city would be EVEN dirtier. The unions do not have a monopoly on picking up litter – that is just a harmful, selfish position for our City’s cleanliness. Local 261 leaders seem more concerned with keeping their own jobs and power over actually helping San Francisco.
” If only members of Local 261 were allowed to pick up trash in SF, and no other people could do this for any type of gifted compensation, our city would be EVEN dirtier. ”
Why?
What’s the deal that DPW cannot keep the streets clean without slave labor or citizen volunteers?
In the case of Downtown Streets, it is clear that the compensated staffers are quaking in their boots at the prospect of their uncompensated labor for contracts scam implodes. There’s plenty of money in this picture. None of it goes to keep the streets clean.
And in the case of Refuse Refuse San Francisco, associated with conservative Democrat electeds, it seems that the goal is to accept that SFPDW is too corrupt to be up to the task of keeping the public realm clean and to shift that burden onto residents as unpaid labor.
Remember back during the pandemic when paid staffers at Calle 24 had a street cleaning to “organize the vendors” where uncompensated volunteers did the work? The vendors just do what they want and the streets remain filthy.
Whenever we see sympathetic project of street cleaning, that’s an indication that something else dirtier is going on beneath.
100%. This whole scenario is nonsense. DPW should be responsible for all street cleaning. There should be no “volunteer” labor by nonprofits. Cut out the middle man. DPW can employee these people according to the laws we have. We’ll have more control and insight over the operation. And hopefully better results.
Or, perhaps, we need to realize that until everyone has a place to live and access to mental health and drug treatment, this problem will continue?
It’s just staggering how much money gets spent on cleaning up after a problem, instead of preventing it in the first place.
@marcos I think that DPW can’t keep up with keeping the streets clean because SF residents and visitors don’t do enough to pick up after themselves, keep their garbage contained, and not illegally dump.
No city relies solely on its public works staff for litter – volunteers, non-profits, and a cleaner culture are critical to this.
They pay people $6 an hour in gift cards. They’re supposed to pick up needles and all types of things fecal matter.