Case study SF: How nonprofits rip off cities, philanthropists
City prosecutors have launched a criminal investigation into the nonprofit San Francisco Parks Alliance, a prominent fundraiser for the city’s open spaces that admitted recently to misspending at least $3.8 million. The Chron reports.
An investigator with the San Francisco District Attorney’s Office contacted at least two people with ties to the Parks Alliance after the Chronicle began revealing the breadth of the organization’s financial crisis on April 28.
One of those contacted by the office was Nicola Miner, a philanthropist whose family’s charity, the Baker Street Foundation, gave $3 million to the Parks Alliance to help develop Crane Cove Park in the Dogpatch neighborhood.
The Parks Alliance admitted in an email to her foundation last week that it had improperly spent $3.8 million in restricted funds on its operating expenses, including about $1.9 million donated by Baker Street for Crane Cove.
The Chronicle also confirmed Monday that the San Francisco City Attorney’s Office has begun its own investigation into the Parks Alliance, which could lead to the city suing the nonprofit or prohibiting it from obtaining city contracts, depending on the probe’s findings.
“The recent reports of financial mismanagement at the Parks Alliance are extremely troubling,” said Jen Kwart, a spokesperson for the city attorney. “We are looking into the matter to ensure public resources are used appropriately.
”The investigations are the latest blows to an organization whose board over the years has included a who’s who of City Hall fixtures and their relatives. The Parks Alliance is viewed as a crucial fundraiser for parks and open spaces in San Francisco, but has struggled to keep up with its bills in recent years as its funding dried up, leaving many small businesses and organizations that depend on it waiting to get paid.
The nonprofit acts like a bank for more than 80 smaller community organizations that take care of parks, playgrounds and other open spaces. It manages their books so that they can collect donations without hiring staff or getting nonprofit status on their own. It also serves as a conduit for private donations to pass through to city projects.
Some of its smaller partners told the Chronicle they have waited months to get reimbursed for expenses as low as $100, despite having thousands saved up at the nonprofit.The unnamed source contacted by the district attorney this month is a representative of one of the community partners that struggled to get reimbursed by the Parks Alliance. They said they were asked how they became aware of the financial mismanagement and whether they had evidence of the Parks Alliance misusing restricted funds.Ogilvie apologized to Parks Alliance supporters in an email Monday for the “lack of communication, transparency and accountability that has come from the organization in the past,” saying that the nonprofit had made “significant” improvements in the last month.
Parks Alliance board chair Louise Mozingo, who described the financial crisis facing her organization as “what a friend of mine would call a dumpster fire” in an email to the Baker Street Foundation last week admitting the misspending, did not respond to a request for comment on Monday.
She previously accused the nonprofit’s former CEO of concealing the mismanagement from the board.The crisis spurred more than a dozen of the Parks Alliance’s community partners to form a new advisory committee this month to try to save it, rather than pulling out their money.
This is not the first time the Parks Alliance has caught the attention of law enforcement. In 2020, it was a key player in the scandal surrounding former Public Works head Mohammed Nuru, who controlled an account at the Parks Alliance that federal prosecutors called a “slush fund.”
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