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SF Takes Action: Perspectives on Nonprofit Displacement Part II

Monday, July 11, 2016

Foundation Center West created a tool, Foundation Map California, to visualize Northern California's philanthropy data. Their series on nonprofit displacement brings together our shared interest in the use of data to better understand philanthropy's impact on the region and the issue of nonprofit displacement. 

Foundation Center West's Nonprofit Displacement Series

The San Francisco-Bay Area's social sector is at a critical junction. Surges in real estate prices are forcing nonprofits to close their doors or relocate. Many of these organizations' beneficiaries have also faced eviction, or have had to move. Foundations and city governments are searching for solutions and innovative strategies to maintain the Bay Area's cultural integrity, and long-standing social institutions. At Foundation Center West, we strive to feature the voices of our social sector community. We were inspired by the Northern California Grantmakers' recent study on displacement and eviction in the San Francisco-Bay Area, and decided to reach out to representatives from nonprofits, foundations, city governments and others to continue the conversation. We are excited to bring you this blog series, Could We Stay or Should We Go? Perspectives on Nonprofit Displacement in the San Francisco Bay Area.  Below is the second post in the series.

A Conversation With

Brian Cheu, Director of Community Development
Mayor’s Office of Housing and Community Development


What is your experience, in your role as the director of community development, with displacement in San Francisco?

Our office deals with issues of displacement at both the residential and the nonprofit levels. For example, we administer a program that provides individuals that have been displaced through the Ellis Act with a certificate that grants them preference for government-subsidized affordable housing. We also fund a variety of tenant counseling and eviction defense groups. Because of a significant increase in evictions of all kinds throughout San Francisco, the city has given several millions of dollars to these programs.

Our office headed up the citywide working group on nonprofit displacement. It was created by the Board of Supervisors after a public hearing at which lots of different nonprofit groups went up to the microphone and talked about how their rents were skyrocketing after having been stable for many years. They also spoke about what their inability to cover those costs would mean: they might have to close their doors; move to a neighborhood which would no longer be accessible to their clients; or move out of San Francisco entirely, which of course would also make their services inaccessible to their clients. They asked the city, “What will you be doing? What can the city do to help all of us?” Although the city provides funding to a great deal of these nonprofits, if they have to close their doors, their services are moot. In response to this meeting, we came up with a white paper that has a comprehensive set of recommendations on what to do to address nonprofit displacement. Then, we created a technical assistance program that provides direct financial assistance to nonprofits to cover relocation costs, tenant improvements, and or a limited amount of rental subsidy to cover the difference between their previous rent and their current rent while they get themselves back on their feet.

How has displacement affected our local community?

What we've seen is that a significant number of our low- and moderate-income residents have been forced out of the neighborhoods in which they've lived for years, sometimes generations. They’ve been forced to relocate, sometimes many, many miles away outside of San Francisco. It's been a real challenge trying to figure out what we can do to keep the unique flavor of San Francisco intact through this recent economic boom. Similarly, while nonprofits were just starting to recover from the recession, they are now being hit by massively increasing rents. This has really threatened the ability of many safety-net nonprofit services to remain in place for our most vulnerable populations. So the low-income population is hit on both sides: they're at risk of losing their housing, and they're also at risk of losing the services that support them.

How has displacement affected the social sector at large in San Francisco?

While I’ve found that philanthropy is often ahead of government, in this case I actually feel that the government was ahead of philanthropy on this issue. Partly because we have such a direct connection with our beneficiaries, and because we're government, people are not afraid to march in and demand that we deal with this problem right away; they’re not afraid to say, “You need to fix this!” People tend to be much more solicitous when they’re dealing with a foundation. We gave an initial briefing to philanthropy and realized that we needed additional data to solidify their interest. And it wasn’t until we commissioned a study in partnership with Northern California Grantmakers that we were able to actually get much more interest from philanthropy—in part I think because we were able to incorporate their grantees’ responses in the report.

We're in favor of philanthropy coming up with responses that can supplement what we can offer. But philanthropy tends to fund nonprofit programming, and is generally not comfortable funding increased rent, or capital improvements to buildings. We're also hoping that philanthropy might be willing to invest in some long-term, permanent options for nonprofits. Creating permanent homes through multi-tenant buildings and community ownership is really the only way that you can assure that these non-profits will be there in the long term. Community Arts Stabilization Trust (CAST) is a great example. I'm hoping that we can get that same kind of thing on the social services side. I haven't seen that same degree of coordination, maybe because in the social services arena, services are so varied, and arts groups tend to be much more closely affiliated.

What do you think the future holds for the Bay Area’s social sector?

It's a time of increased wealth, and the average income has grown significantly over the last few years. So one could imagine that it would be a time of possible growth for organizations, but I haven't seen that. Instead, I've seen that nonprofits are struggling to stay alive—more than ever before. They're not even able to pay their staff the wages that allow them to stay in the Bay Area. I feel that it's going to become more and more of a challenge for the “safety net” service organizations to stay afloat if their own staff can't really stay in the city, and their organization can’t afford to pay rent in the city. What's going to be left for the low-income population without any support system?

Philanthropy needs to come up with a direct response in a very, very timely way and to realize that their overall investments in these organizations are at risk unless they're willing to look at the bigger picture of what truly makes a stable nonprofit. Philanthropy has looked at, ‘how strong is your board?’ and, ‘what are the skill sets of your executive director?’ But they also have to look at the long-term sustainability plan for their grantees—and that includes a permanent location for the nonprofits they fund.

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