Urban Alchemy, a prominent San Francisco nonprofit that operates in cities around the nation, “knowingly overspent” hundreds of thousands on pay bumps for its staff and other expenses last fiscal year under a contract it received to run a homeless shelter near the Tenderloin, city analysts say.The excess spending, which emerged Wednesday at a City Hall hearing, jeopardizes the $22.7 million contract to run the shelter that the nonprofit received from the Department of Homelessness and Supportive Housing. It comes amid mounting scrutiny of Urban Alchemy, which expanded from San Francisco into cities in five other states grappling with homelessness. Urban Alchemy’s model of hiring formerly incarcerated people to patrol the streets as community ambassadors proved popular in San Francisco and elsewhere as city officials looked for ways to calm chaotic neighborhoods coming out of the pandemic.
The revelation on Wednesday came after a related warning from the controller’s office last month over the nonprofit’s spending. It designated Urban Alchemy as a “tier 2” nonprofit over an employee timekeeping issue. The designation means the nonprofit poses “increased risk to public funds and client services.”
Meanwhile across the country, Urban Alchemy is on the verge of losing a contract from the city of Austin after the nonprofit’s staff misrepresented homeless shelter data. Urban Alchemy said it had discovered the issue, reported it to the city and fired the employees responsible…