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San Francisco Chronicle
5 days ago
- Business
- San Francisco Chronicle
How a San Francisco nonprofit scandal hurts quirky neighborhood park projects
After years spent transforming a San Francisco hillside once littered with trash into a lush community garden, a group of Portola neighbors hired a contractor this spring to turn the drab concrete steps cutting through the landscape into a colorful tiled stairway. The Steps to Wisdom project reimagined the public path leading up Goettingen Street as one reminiscent of the beloved Moraga Steps, a tourist destination on the other side of town. The vibrant steps now greet visitors with inspirational quotes. 'Leave the world more beautiful than you found it,' one reads. But as the contractor completed the $91,000 installation this week, a grim reality set in. The San Francisco Parks Alliance, the nonprofit that the neighbors had trusted to safekeep their community funds, had fallen into a deepening financial pit that ultimately forced its collapse Tuesday. Now the neighbors don't know how they will pay their debts. 'It's quite distressing,' said Phillip Hua, an artist and member of the Goettingen Street Neighbors, who is owed $15,000 for designing the stairs. Hua and his neighbors are far from alone. More than 80 community groups that used the Parks Alliance like a bank to channel and safeguard their money learned this week that the nonprofit would wind down its operations and liquidate its remaining assets through a process akin to bankruptcy. The Parks Alliance and its predecessor entities were close allies of the city for decades, helping funnel private donations to public causes and advocate for bond measures to improve parks and open spaces. In recent years, the alliance was involved in an array of projects, from renovating playgrounds to opening up schoolyards to children on the weekends to hosting outdoor movie screenings and other free events. The nonprofit also acted as a fiscal sponsor for dozens of small community partners like the Goettingen neighbors, charging them a small fee to manage their books and collect donations on their behalf so that the often volunteer-led groups didn't need to hire financial staff or become nonprofits on their own. Now that the Parks Alliance has folded, it's not clear how the city and the community groups that worked with the nonprofit will fill the void created by its departure. The scandal comes at a difficult time for San Francisco's finances, as Mayor Daniel Lurie and city supervisors work to close a massive budget deficit. At the parks department, officials are looking to charge residents to reserve tennis courts and park their cars in Golden Gate Park. Since at least last summer, the Parks Alliance had confided in a select few about its cash-flow problems, asking major donors for last-minute cash injections to help it survive. Word of its potential demise reached as high up as the city's top parks official, Phil Ginsburg. But what many say they did not realize — until after a change of leadership several months ago — was that the Parks Alliance had misspent millions while trying to stay alive. In late April, the Chronicle revealed through a leaked email from Parks Alliance leadership that the nonprofit had misused at least $3.8 million earmarked for specific projects to pay for its operating expenses as its revenues from city grants and other sources declined. The new Parks Alliance CEO, Robert Ogilvie, tried to save the nonprofit through a final burst of fundraising in recent weeks, but the organization ran out of money to continue operating. The nonprofit laid off the last of its employees and its board members resigned. All across San Francisco, people who volunteer their time and labor to make the city more beautiful are now left waiting to see whether the Parks Alliance will return the money the community groups had saved up at the nonprofit over the years. The collapse has delayed at least one long-awaited project, stalled ongoing maintenance on public spaces and jeopardized payments to community members and contractors who footed bills or completed work. It also resulted in layoffs for one paid group that maintains the urban forest on Mount Sutro. 'All these groups were working to improve our city, most of them are unpaid volunteers,' said Jennifer Serwer, a Potrero Hill resident whose plans to build a new public stairway were postponed by the crisis. 'For [the Parks Alliance] to just mismanage itself, it's very painful.' As of last month, the Parks Alliance had an estimated $4.6 million in outstanding obligations, including $1.7 million it owed to its community partners and their service providers, according to an email from its board chair, Louise Mozingo, to a donor. At the same time, the nonprofit had just $1.6 million in remaining assets, including $620,000 to use on its operations. It's possible that the community partners who used the Parks Alliance as a fiscal sponsor could receive just pennies on the dollar through the liquidation process. 'The likelihood is that there is no money left to be shared,' said Rasheq Zarif, whose neighborhood group had saved up $100,000 in an account at the Parks Alliance to use toward maintenance and repairs at Buena Vista Park. Also left in the lurch is the city of San Francisco. The Parks Alliance owes the Recreation and Park Department between $1.1 million and $1.7 million across various partnerships, according to estimates from the city and the nonprofit. Those obligations include private funds the Parks Alliance collected on behalf of the city as part of the development of the India Basin Waterfront Park project on the southeast shoreline. The Parks Alliance also signed a contract promising to pass on $3.25 million to the Port of San Francisco for improvements at another major project, Crane Cove Park. However, the nonprofit only paid the city an initial $975,000 before deciding to shut down. The unpaid amount does not appear to be included in the Parks Alliance's $4.6 million figure. City supervisors Shamann Walton and Jackie Fielder were expected to seek answers Thursday from the city parks department and the port at a hearing about the crisis. But the hearing was delayed, because Walton is seeking to subpoena several former Parks Alliance leaders to testify at the hearing at a later date. Meanwhile, at the Goettingen Street tile stairway, neighbors are preparing to hold a celebratory ribbon-cutting for their project on Saturday — even as they contend with lingering questions about its financing. The origins of the project trace back more than a decade. Frustrated with what had become a dumping ground for condoms, needles and other trash, neighbors in the Portola landscaped the hill near Goettingen and Dwight streets. Then, in 2021, the city awarded the neighbors a grant worth up to $157,000 through the Parks Alliance to tile the stairs. Community members hoped that adding an artistic element to the graffiti-covered stairs would make the area more of an attraction and deter blight. Supporters also raised more than $70,000 in donations. They allowed donors to choose inspirational quotes on tiles and asked for contributions during Zoom yoga classes. The Parks Alliance held all of those donations for the group as its fiscal sponsor. Neighbors hoped to use the funds to pay for the tile installation and maintain the steps and surrounding hillside for years to come, said Hua, the artist who designed the project. 'Now all of that is in jeopardy,' Hua said. 'We don't know what is going to happen with the funds that we have worked so hard to fundraise for.' Ruth Wallace, the project manager for the Goettingen steps initiative, said she asked the Parks Alliance to pay the $91,000 owed to the tile contractor just before Memorial Day. A Parks Alliance staff member told her the nonprofit had received the request and would try to do something about it, Wallace said. Then the organization stopped communicating with her. In a frustrated email to the Parks Alliance and Lurie on Monday, Wallace recounted her desperate efforts to get clarity from the nonprofit. 'I have been calling your offices last week and this week to find out how and when you expect to pay our very deserving vendors,' Wallace told the Parks Alliance. 'I have left voicemail after voicemail as more and more extensions have been disconnected.' The city had not yet released $116,000 to the Parks Alliance for the tile project from the grant. It's unclear how the Goettingen neighbors will be able to receive those funds, since Lurie paused the flow of city funding to the nonprofit and the organization later closed. 'It would be a shame to let this hillside now go to the wayside and have time and weathering just take it over and slowly degrade this thing we worked so hard to create,' Hua said. Jen Kwart, a spokesperson for City Attorney David Chiu, said in a statement that the city is 'working with granting departments to analyze any current grants with remaining balances and will develop a path forward.' Across town from the Goettingen steps, at a small commercial strip along Ocean Avenue, Kath Tsakalakis and her neighbors relied on the Parks Alliance to turn an underused parking lot into a plaza five years ago. Today, residents often use the space to sip coffee at tables that sit atop pavement painted with a giant red octopus. The plaza has hosted events such as a recent 'spring hop' that featured rabbits and a candy hunt to entertain children on Easter weekend. But Tsakalakis's group of volunteers has suspended its events, which drew customers to nearby businesses in the Lakeside Village corridor. Street lighting maintenance, power washing, trash pickup and graffiti cleaning have been halted as well. Tsakalakis said the Parks Alliance owed about $12,000 to small businesses in the area and another $12,000 to her because she has been paying for many of the plaza-related expenses herself and seeking reimbursement later. 'We can't keep the street clean. We can't keep, literally, the lights on,' Tsakalakis said. 'Because I can't keep asking small businesses to do more repairs or work when I have no way to pay them, and they're owed a lot of money. So I think there's a lot at risk.' Even after accounting for the outstanding expenses the Parks Alliance never covered, Tsakalakis said her group should have had another $16,000 in its account with the nonprofit. The number would have been higher if not for the Parks Alliance's well-publicized problems, she said. 'I had applied for grants, but who's going to give money?' Tsakalakis said. 'People who were going to give us money are not giving us money because of the Parks Alliance.' Serwer, of the Friends of Potrero Hill Recreation Center, feels like one of the lucky ones, even though her group had about $18,000 saved up at the Parks Alliance it may never get back. She had just completed a fundraising campaign to build a new public stairway near 22nd Street that would help connect Potrero Hill to the Dogpatch. But after the financial crisis burst into public view, the Parks Alliance agreed to return $55,000 in donations that two donors had just contributed for the project. Serwer has since found a new fiscal sponsor to shepherd the project through. While she hopes to begin construction this fall, she said the project could be delayed until early next year. At least the new fiscal sponsor will charge less to manage her books. 'We're extremely lucky,' she said. 'We're landing in a better place.'
CBS News
23-05-2025
- Business
- CBS News
San Francisco launches review of parks nonprofit accused of misusing millions in funds
San Francisco city officials announced Friday that a "public integrity assessment" will be conducted on the San Francisco Parks Alliance, amid reports that the nonprofit improperly spent millions of dollars. City Attorney David Chiu said he and City Controller Greg Wagner will conduct the joint review of the group's finances and its agreements with city departments. The review was requested by Mayor Daniel Lurie's office, the city's Recreation and Park Department and the Port of San Francisco. "The public reports of financial mismanagement at the Parks Alliance are extremely troubling," Chiu said in a statement. "Any contributions meant to benefit the public should be used for that purpose." Wagner added, "The serious allegations we're hearing about Parks Alliance need to be addressed with urgency." According to Chiu, the Parks Alliance raises money for minor civic improvements and large-scale construction on public spaces. The group has agreements with the Recreation and Park Department along with the Port for these purposes. Chiu said many of the funds raised under the agreements can only be used for city-approved projects and cannot be used for Parks Alliance staff salaries or other unrelated administrative overhead. A recent report by the San Francisco Chronicle found the group used at least $3.8 million earmarked for public projects to instead cover its own operating costs. The group's former CEO and CFO have departed. Donors along with families who rely on city parks have expressed outrage over the allegations. One of the largest donors, the Baker Street Foundation, told CBS News Bay Area that it contributed $3 million to the organization to build two playgrounds at Crane Cove Park in the city's Dogpatch several years ago, but the projects have not materialized. Nicola Miner, part of the Baker Street Foundation board, said she learned only recently that $1.9 million of the donated funds had reportedly been spent on general expenditures. "I wanted a park here, that was what our money was for. The money was not for general operating expenses. And so, I just feel a real sense of betrayal," she told CBS News Bay Area. Miner said the greatest loss is felt by local families who had counted on the playgrounds for their children. "The fact that they took money away from families, I'm speechless. I actually can't even believe somebody would do that," she added. In the meantime, Lurie has instructed city departments to pause any outstanding grants to the Parks Alliance and has directed city departments not to enter into any new partnership agreements with the group.
