Nancy Nielsen of Lutheran Social Services of Northern California.
San Francisco’s economy is on a roll right now. Our unemployment rate is just 4.7 percent. The mid-Market tax break has more than paid for itself. We’re at the center of the high-tech economy. These are, in and of themselves, good things—but that doesn’t mean that their effects aren’t hurting our nonprofits. The gentrifying economy isn’t just displacing the poor—it’s displacing the organizations that serve the poor too.
Bloomberg Businessweek dives into the gory details of how social-service nonprofits are struggling to adapt to a changing landscape. The 130-year old Lutheran Social Services of Northern California, which among other things advises residents on finances, lost its Market Street lease in a building near the Twitter headquarters. A tech company had moved in upstairs and the landlords decided to double the rent, to more than $200,000 a year, in hopes of attracting another. So out the nonprofit went, ending up in a Tenderloin building that required $600,000 in renovations—of which the Lutherans still owe $400,000.
This is far fro the only affected organization. CompassPoint, which provides training and support to other nonprofits, jumped to Oakland last year—as did the Center on Race, Poverty & the Environment, a legal nonprofit, and the Transgender Law Center. According to a city report, almost 2,000 nonprofit groups moved or shut down from 2011 to 2013—a full quarter of the total.
The city has been struggling to respond. Though it has created a $4.5 million fund to assist with moving costs, many nonprofits say that isn’t enough.