San Francisco Sun

In March 2024, the San Francisco Board of Supervisors passed an ordinance sponsored by former Supervisor Catherine Stefani, directing the Controller’s Office to establish new policies for monitoring nonprofit contractors. Today, the Controller’s Office released a series of products fulfilling these legislative requirements and offering additional guidelines and tools.

The City of San Francisco contracted with nonprofits to provide $1.5 billion in services last year, with spending increasing by 63% since 2019. While many nonprofits deliver quality services, some exceptions have highlighted the need for better oversight. The new policies set foundational requirements for departments contracting with nonprofits.

Controller Greg Wagner stated, “This work is critical to ensure we’re providing the best services possible when the City partners with nonprofit organizations.” He emphasized that the policies create a framework for transparency and accountability in spending by City departments and engaged nonprofits. Wagner added that focus should also be on measurable performance targets and reporting results.

A key element of this initiative is a new Contract Monitoring Policy, which sets citywide standards for how departments should oversee nonprofit service providers. This policy includes guidance on performance measures, reporting standards, monitoring requirements, and engagement expectations with nonprofit contractors.

The publications also offer updated financial monitoring guidelines, a new financial auditing policy for nonprofits, updates to the City's corrective action policy for unmet contract expectations, and recommendations for improving public reporting on nonprofit contracting.

Additionally, as mandated by Stefani's legislation, the Controller’s Office has developed new webpages and web-based tools to help departments, nonprofits, policymakers, and community members access information on nonprofit contracting more easily. This includes interactive dashboards displaying data from the City's financial system about spending on nonprofit contracts over time.

To develop these policies, the Controller’s Office engaged hundreds of individuals from City departments and nonprofit organizations in a collaborative process required by the ordinance. In the coming year, they plan to expand the Citywide Nonprofit Monitoring and Capacity Building Program to include fiscal and contract monitoring components.

The Controller’s Office will continue posting updates on their new webpages and issue required reports on contract monitoring practices by the end of 2025.