Government-Funded Homeless Non-Profits in LA Lack Accountability and Oversight
Source: Chris Bray. "Los Angeles Is Flooded With Government-Funded Non-Profits." September 9, 2026. thefederalist.com
The Gist
The author argues that a major Los Angeles non-profit called SSG, which gets almost all its $264 million budget from government grants, shows how the city's homeless services system is broken—citing an abandoned motel renovation, a fraud scandal involving a business partner, sloppy paperwork, and the organization's refusal to answer questions. He suggests this one case reveals a much bigger problem across the more than 100 similar non-profits that receive public homeless services funding in LA County.
Conclusion
Los Angeles's system of government-funded homeless services non-profits, exemplified by Special Service for Groups (SSG), operates with dangerous levels of financial opacity, mission creep, and lack of accountability, effectively functioning as unaccountable government agencies while evading public transparency laws.
Premises
- SSG receives 98.5% of its $264 million annual revenue from government grants, making it functionally a government agency despite being structured as a private non-profit corporation exempt from public records and open meeting laws.
- SSG's revenue grew explosively from $26 million to $264 million in under 20 years, with massive jumps corresponding to specific tax measures (Measure H in 2017, Measure A in 2024), suggesting funding expansion outpaced organizational capacity and oversight.
- SSG spent $8.5 million in public funds to acquire a former operating motel for homeless housing conversion, but six years later the property sits gutted and fenced, unused and unconverted.
- SSG had a significant financial partnership with Alexander Soofer, who now faces fraud charges for allegedly diverting $10 million in public homeless services funding to personal luxury expenses.
- SSG's own IRS Form 990 filings incorrectly reported for several years that they were passing funds to a non-profit corporation (Abundant Blessings from Above) when in fact this was a for-profit corporation, indicating SSG failed to verify the basic legal status of an entity receiving millions in public funds.
- SSG and LAHSA refused to respond to multiple attempts by the author to seek comment or explanation, including blocked emails and denied in-person access, suggesting an unwillingness to be transparent about use of public funds.
- LAHSA alone funds over 100 similar nonprofit partner agencies, implying that the problems documented in SSG's case may be indicative of a broader systemic issue across Los Angeles's homeless services funding structure.
Assumptions
- The specific failures documented at SSG (the motel, the Soofer scandal, the 990 filing error) are illustrative of systemic problems rather than isolated incidents.
- Extremely high proportional government funding (98.5%) is itself evidence of problematic structure, rather than being a normal characteristic of contracted social services agencies.
- Non-profit status combined with public funding should trigger transparency obligations equivalent to those of government agencies.
- Rapid revenue growth necessarily outpaces organizational capacity and oversight ability, rather than reflecting legitimate scaling to meet demand.
- A non-profit's failure to correctly identify a partner's for-profit status on tax filings indicates broader negligence rather than a narrow clerical/verification lapse.
- The reader will accept documented anecdotes about one organization as sufficient evidence for characterizing an entire funding ecosystem.