Citywide Nonprofit Monitoring and Capacity Building Program

Each year, San Francisco departments contract with hundreds of nonprofit organizations to provide  services to the community. In 2024, these contracts represented about $1.5 billion in City support.

Departments must perform regular oversight (called monitoring) of nonprofits they contract with for services. Departments can complete monitoring during a site visit to the nonprofit or virtually, such as reviewing documents and having online meetings. 

The Controller’s Office administers the Citywide Nonprofit Monitoring and Capacity Building Program. This program has two primary components: a Fiscal Monitoring Program and a Contract Monitoring Program. 
 

Fiscal Monitoring Program

In this program, departments conduct standardized and coordinated financial and compliance reviews of nonprofits each year. Through our program, nonprofits receive the benefit of:

• Coordinated monitoring (meaning, if a nonprofit receives funds from multiple departments, monitoring will be combined into one monitoring event).
• Standardized monitoring (meaning, each department applies a consistent set of standards.  
• Training, tools, and support to build their internal capacity.

Which nonprofits receive fiscal monitoring?

Our program conducts a risk assessment each year to determine which nonprofits are part of the “monitoring pool.” Some departments that conduct monitoring independent from our program must use a similar risk assessment to determine which nonprofits to monitor, but these won’t be included in our coordinated “monitoring pool.” 

The monitoring pool includes nonprofits that:

• Receive $1 million or more from at least one department.
• Receive at least $200,000 in total from two or more departments (if they get at least $50,000 from each funding department).

The monitoring pool does NOT include nonprofits that:

• Receive funding from only one department and receive less than $1 million.

Some of our standards may apply whether a nonprofit is in the monitoring pool or not. For example, departments need to review invoice documentation for all contracts over $200,000, and nonprofit organizations may be required to produce audited financial statements if they meet funding thresholds. 

Contract Monitoring Program

The Controller’s Office issued a new policy in November 2024 about the contract oversight activities City departments should use. The policy requires departments that contract with nonprofits to deliver services to do the following: 

• Include performance measures in contracts
• Require at least annual reporting
• Conduct contract monitoring at least once a year, including a site visit during the contract period
• Meet with and engage with contractors quarterly
• Provide written policies about their oversight practices

The program does not administer a “joint” or coordinated contract monitoring process as it does for fiscal monitoring. However, the program convenes departments to support consistent implementation of the policy and provides guidance and tools for both departments and nonprofits. 

Which nonprofits receive contract monitoring?

Departments must monitor nonprofit contracts that are more than $200,000 per year when those contracts are for services to the public. Departments may monitor smaller contracts if there are risk factors.