In Austin, nonprofits get funding even when they admit total failure.
For example, Austin paid a nonprofit to improve the mental health of 362 people. It said it helped 73, yet the city paid the full contract anyway.
When the city auditor checked just 25 nonprofit contracts, 19 had missed at least one of their own performance targets.
Back in 2019, the city auditor found these contracts skip the normal competitive bidding process, and Austin's anti-lobbying rules don't apply to them for some reason.
That means nonprofits seeking city money can lobby council members and city staff directly while their contracts are being decided. This is a practice that is totally banned for companies bidding on ordinary city contracts. Why do nonprofits get special privileges that promote corruption?
The auditor told the city to fix all of this. Seven years later, neither fix has happened, the contracts keep getting extended, and the new target date for any potential fix is October 2027.
Tomorrow, council votes on another $19 million for these nonprofits.
Austin caught 26 taxpayer-funded nonprofits overbilling, missing deadlines, and failing their targets -- and recommended cutting exactly none of them.
Some of these orgs billed the city for items they weren't allowed to charge, some turned in late or incomplete work, some missed the targets they said they would hit.
Yet amazingly, city staff recommends these orgs continue to get paid, and council will vote tomorrow on extending these contracts.
Austin spends $101 million a year on social services, and $54 million goes to homelessness nonprofits.