July 23, 2009 | Read Time: 2 minutes
With San Francisco facing a budget gap of roughly $438-million this year, it seemed inevitable that nonprofit groups were likely to feel the pain of the government budget ax.
But at the request of Mayor Gavin Newsom, the city attorney and the San Francisco Foundation brought together a group of government and foundation officials in January to study ways to minimize the impact on people served by the city’s charities.
Their recommendations, released in April, include ways to cut charities’ administrative costs, support mergers and closures, and diversify sources of revenue.
“This was a way for us to try to make lemonade out of lemons,” says Catherine Dodd, deputy chief of staff for the mayor’s office. “We wanted to make sure we were putting our resources into the community as efficiently as possible.”
The report recommends promoting the use of existing “management services organizations,” which centralize and consolidate administration. The city, which spends about $58-million currently to help nonprofit groups that receive city money pay for their administrative expenses, is seeking applications from such services organizations. The report also suggests that San Francisco help identify possible partnerships among charities and provide money and managerial advice for groups that are merging or closing. In May, the San Francisco Foundation created a $250,000 fund that is providing grants to charities that want to explore restructuring.
It’s unclear what, if any, of the committee’s other ideas might be adopted. But the city has already taken some steps in recent years to improve its relationship with charities. For example, it has centralized the monitoring and auditing of charities and started notifying nonprofit groups earlier about their grants.
‘A Good Start’
While many charities have welcomed San Francisco’s most recent efforts, others are worried that the city is too eager to support consolidation and may not offer enough resources to help charities restructure or diversify their support.
Sherilyn Adams, executive director of Larkin Street Youth Services and one of several nonprofit officials who advised the committee created by the mayor, described the report as a “good start.”
But she said there are concerns among some of her colleagues that “this is an easier-said-than-done process” and that charities wanting to diversify their revenue will not be able to do so in this economy.
