The Facts:

San Francisco now spends $1.63 billion a year on contracts with nonprofits, up from $809 million in 2019 and from 6.6% to 10.2% of the city budget, according to a Chronicle analysis. Most new spending runs through the homelessness and public health departments, powered by Prop. C business taxes and pandemic‑era funding.

The Context:

This surge sits inside a roughly $16 billion budget that has grown about two‑thirds (inflation‑adjusted) since 2011 even as structural deficits loom, per a separate Chronicle budget review. The Controller’s Office says more than 600 nonprofits now deliver around $1.5–$1.7 billion in safety‑net services each year through its citywide monitoring program. A 2022 Controller audit of nonprofit oversight found departments using inconsistent performance metrics and recommended stronger evaluation standards, which led to updated citywide monitoring policies.

The GrowSF Take:

San Francisco has leaned on nonprofits for so long that City Hall has stopped building its own capacity to run shelters, treatment, and housing at scale. That’s a problem. When government doesn’t know how to operate these systems directly, it also struggles to set smart standards, compare providers, or replace underperformers.

Nonprofits will always have a role, but they should be the exception for specialized services—not the default operator of core safety‑net functions. Without clear performance metrics and public reporting, the quiet incentive is to seek bigger contracts while cutting corners on service quality.

We want a city that can do hard things itself: staff and manage high‑quality programs, learn from what works, and only outsource when it clearly adds value. That means growing in‑house expertise, tightening accountability for every major contract, and being willing to end relationships that don’t deliver real results on our streets.