Homeless Nonprofit Blows $240M in Taxpayer Money While Not Reducing Homelessness

meunierd / shutterstock.com
meunierd / shutterstock.com

A “nonprofit” organization in San Francisco that is allegedly dedicated to fighting homelessness has found itself in hot water following an audit. HomeRise is one of the city’s main providers of homeless housing units. The nonprofit has somehow managed to blow through $240 million in taxpayer money while not actually helping any homeless people transition off the streets and back into normal life. It’s typical of many industries in California, where nonprofits are more interested in gobbling up public money than they are in solving problems.

HomeRise is just one of many problematic organizations operating in San Francisco’s “homelessness industrial complex.” The mayor’s office discovered some possible issues with HomeRise’s books in 2022 and contracted with Sjoberg Evashenk Consulting to probe its finances.

The nonprofit operates 19 apartment complexes across the city and has 1,500 low-income apartments that it manages on a $34 million annual budget. The purpose of the apartments is to move homeless people into them, so they can transition back into a normal life while receiving needed services like mental health and drug counseling. It’s a system that mysteriously works in big cities in red states, but not in big cities in blue states.

The auditors found “unallowable, imprudent, or questionable spending” by HomeRise. It turns out the nonprofit was spending city taxpayer dollars on fundraising events for itself, paying lavish staff bonuses, and providing lunches and gifts to staffers. Meanwhile, it spent next to nothing on helping the homeless.

When the auditors released their report this month, it revealed that HomeRise had issued 118 credit cards to staffers. Many of the cards were maxed out at their $10,000 limit. The nonprofit also paid signing bonuses to staff members who had worked there for years. One staffer received an $87,000 pay increase over a period of nine months.

Meanwhile, the nonprofit was losing money hand-over-fist because its mismanaged properties were sitting empty. In July 2023, two of its apartment buildings in the Tenderloin district were one-third empty. Every vacancy represents an opportunity to get another homeless person off the streets, but HomeRise wasn’t doing much, if anything, to try to fill up its units.

The auditors found that the hundreds of empty apartments “represent missed opportunities to provide unhoused people with permanent, supportive housing.”

The watchdog group Open the Books found that HomeRise had received contracts from the city that included $110 million in loans, $90 million for operations, and $40 million in grants for support services.

“It’s unclear exactly how much of the $240 million grants, loans, and subsidies was misused,” said Adam Andrzejewski, the CEO of OpenTheBooks. “But what is clear is that this company should never have been trusted with public funds.”

Amazingly, the city is not accusing HomeRise of fraud or even calling for contracts with the nonprofit to be canceled. This is one of the biggest problems in liberal California when it comes to the misuse of taxpayer money. Everyone in the government is in on it, and no one is ever held accountable.

Instead of prosecuting HomeRise for embezzlement and fraud or trying to claw back the $240 million that the charity wasted, the auditors recommended that city agencies strengthen their oversight of the contracts.

“The City has a vested interest in HomeRise remaining a viable housing operator for its existing tenants and a developer of low-income housing in the future,” wrote the auditors.

Meanwhile, homelessness increased by another 6% in 2023 as HomeRise was throwing lavish parties for itself with taxpayer money. The state government isn’t doing any better. Despite spending more than $24 billion to “tackle homelessness” since Gavin Newsom has been the governor, California’s homeless population has done nothing but grow by leaps and bounds.

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