Allocation of city workers’ charity draws concerns

A city review of San Francisco's decades-old annual employee charity drive found the program lacked sufficient clarity about where money from some workers' paychecks winds up.

At issue are the donations to charity federations, which represent thousands of nonprofits. Federations are features of most workplace giving programs and provide administrative and marketing support to nonprofits. Many are organized around a specific theme.

In San Francisco, city employees can designate payroll deductions every year to give to one of several charity federations, specific nonprofits under those federations or organizations of their choice.

The city recently temporarily paused its end-ofyear fundraising drive after employees complained that the program facilitated donations through one federation — CHC: Creating Healthier Communities — to anti-LGBTQ nonprofits, bringing a review.

But it turns out employees' fears were misplaced — because none of the general gifts to that federation ended up with any member nonprofits.

In fact, that federation, as well as another one, kept general donations to support its own operations. But employees said that wasn't clear.

The review raised larger concerns about the oversight and transparency of the program that raises more than $1 million a year for nonprofits from some of San Francisco's 32,000 employees.

Every day that passes with the program on pause probably reduces the amount employees will pledge this year — what the city says at its core is a worthy cause.

“We are working to relaunch this year's campaign as quickly as we can to ensure that we continue to facilitate pledges and gifts to non-profit organizations that support causes important to our coworkers,” the city administrator's office, which sets up the program, said in a statement. “As always, city workers are welcome to give to any organization that resonates with their own priorities and values.”

The city administrator's office is changing its giving guide to be clearer about where general donations to federations end up. The city has also been talking with the federations, which have recommended potential changes to the program — such as putting in additional criteria for nonprofits in future campaigns, for example, requiring nondiscrimination statements.

Problems with the program, which for years flew under the radar, highlight some of the opaque and outdated systems in San Francisco city government and how challenging they can be to fix.

The program puts the city in a difficult place — while San Francisco wants to stand for ideals backed by its leaders, it must be careful not to infringe on the rights of individual employees to donate to causes they support, even if they're at odds with city policy.

San Francisco started its annual Heart of the City charity drive in 1988.

This year, employees could choose among several types of giving: the city-run pandemic-era program Give2SF, four national charity federations that represent thousands of member nonprofits, a specific nonprofit under a federation, or any organization of their choice.

But employees complained in emails to officials this month that some of the nonprofits in the federations included conservative Christian groups known for their antiLGBTQ stances.

One employee who shared their concerns with The Chronicle called out the federation that represents those two groups: Creating Healthier Communities. The Virginia federation partners with 1,600 federally vetted organizations, plus financially supports 3,500 more with a range of religious and political beliefs, including an LGBTQ clinic in Minnesota.

Over the past few years, city workers gave the federation roughly $44,000, which the nonprofit retained to offset program and operating costs.

“Donors can rest assured that by supporting the San Francisco campaign and supporting CHC, their pledges are going where designated and are not distributed to other groups ‘unwittingly,' ” CHC spokesperson Amanda Ponzar wrote in an email last week.

Federations set their own policies for what to do with general gifts, but city employees say the program doesn't make that clear. The city guide to giving this year says that “Federations disburse contributions to the charities at least quarterly” — which is not true for two of the four federations.

Then there's the question of how much of a cut the federations take. The pledge form is clear that federations take a 10% to 14% administrative fee out of each donation to an individual nonprofit under their umbrella.

Some city workers think the federations take too much in cuts.

One employee, who wished to remain anonymous, said in an email that the lack of clarity about where funds go made them “question the overall governance/oversight of the Heart of the City campaign.”

The employee, who complained earlier this month about facilitating donations to anti-LGBTQ organizations, was relieved to hear no general funds ended up with controversial groups, but said it was still inappropriate the city partnered with federations supporting them.

Ponzar said each charity campaign can decide which nonprofits they want to include. CHC already started gathering nondiscrimination statements from members and is ready to communicate about new criteria if the city makes it stricter, she said.

For next year's campaign, the Board of Supervisors could consider changes to how the city picks federations to prevent the inclusion of nonprofits the city says are discriminatory.