Playing With Politics

A Blog on Law, Politics, Planning, Development, and Other Vices

Should NGOs Merge or Face Closure?

Posted by Roobs on June 24, 2010

In a true sign of the times, i was on Twitter when one of the users i follow posted a link to this San Francisco Chronicle Article.  The article describes how SF is flushed with non-profit organizations (NGOs) who have contracts with the city to provide social services and how SF is considering cutting funding entirely to some of those organizations as a way to deal with their budget deficit.

The hard truth is there are far too many service providers for this relatively small city. They duplicate efforts, they don’t have enough oversight, and they spend hundreds of millions of city dollars.

Now – and here’s the tough part – with the city facing a historic $483 million deficit, some of them are going to have to go. Or, as the San Francisco Community-Based Organizations Task Force put it in April 2009, they need to be “encouraged to identify their placement within the nonprofit life cycle, and contemplate the possibility of closure.”

Close service organizations? Let the howls of protest begin.

At first, i replied to the user who posted the article that i believe SF should consider identifying NGOs that work and those that just duplicate the same efforts.  The user replied by saying that the main issue is that SF needs more revenue.  We didn’t continue our conversation so i can’t speak to whether or not he meant the problem isn’t with duplicate NGOs providing the same service or more generally speaking that SF just needs more money.  Either way, it got me thinking.

As you can probably tell, i think this entirely legitimate for the City of San Francisco to essentially audit its NGOs that receive city funds.  Obviously, i title this post “Should NGOs Merge or Face Closure?” and not “Should NGOs Merge, Face Closure, or Keep Getting Money?”.  I view this as a problem exacerbated by San Francisco and the Bay Area’s good hearted nature and the fact that we LOVE non-profits.  We love them so much that many of us might actually have a few part of our Christmas card list.  We regularly donate money to our favorite ones and will likely just put them on an automatic debit from our credit cards and forget about it.  Whats a few $50 a month to a city with an average annual household income of $86,000?  But the problem there lies with the fact that the NGOs in question are not the “private” NGO that receive your heart-felt donations but the ones that receive money from the city to provide a public service.

The fact of the matter is that there are a lot, and i mean a lot of NGOs in San Francisco and the Bay Area and a lot of them receive public money to run their operations.  And sure, their operations are good.  I mean, how can you argue with helping the homeless, providing shelter to battered women or at-risk teens?  These are good causes, right?  Of course they are.  But what do you do when there are 10+ organizations in a single city providing the same service all receiving the same money?  And in a city the size of San Francisco?

The city contracts with nearly 500 service organizations, spending roughly $500 million a year. In March 2009, the controller’s office presented a report that showed the city and county of San Francisco outspends Los Angeles County by a per capita 8-to-1 on substance abuse, provides three times the per capita amount of funding of San Mateo County on mental health, and subsidizes child and maternal health 31-to-1 compared to Sacramento County.

Read more at SF Gate

The issue that many opponents of such a move by a government is that they city is attacking good-hearted people who are providing a public good and, therefore, are putting people at risk by threatening to remove funding.  But the reality is that if there are 10 organizations doing the same thing and there are a couple that do the best out of all of them, then asking the remaining organizations to either close or merge, to me, doesn’t seem like that bad of an idea.  They are consolidating resources to better provide their services more affectively and efficiently.  Why should we pay for an organization to do the same job as we pay another organization for?  Why cant we consolidate 10 organizations into 2 and just give them a little more money?

I completely support SF in trying to identify NGOs that actually work and provide the best services.  Those NGOs should be the beneficiary of public money.  The mission is still the same and our hearts never leave the right place.  But just throwing money out to every organization that wants to help isn’t the best practice of fiscal responsibility nor is it really helping the cause.

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