Who Pays for San Francisco?

San Francisco Mayor Daniel Lurie poured almost $9 million of his personal fortune into getting elected. Now, he is finding an extraordinary amount of private money to pour into city government: His administration has secured more than $120 million in philanthropic dollars for homelessness, addiction and downtown revitalization. Meanwhile, a network of donors, many of them longtime supporters of Lurie’s former nonprofit Tipping Point, has poured millions into the candidates and ballot measures he favors, winning decisively in June. Supporters call it civic generosity. Critics, particularly progressives, worry that the amount of money is pulling the city rightward. We talk about the impact that money can have on local politics.

Guests:

• JD Morris, City Hall reporter, SF Chronicle
• Sarah Anzia, public policy and political science professor, UC Berkeley; senior fellow, the Hoover Institution
• Rob Reich, political science professor with courtesy appointments in philosophy, law and education, Stanford University; director, Center for Philanthropy and Civil Society; author (with Jeremy Weinstein and Mehran Sahami), System Error: Where Big Tech Went Wrong and How We Can Do Better

This is a computer-generated transcript. While our team has reviewed it, there may be errors.

Alexis Madrigal: Welcome to Forum. I’m Alexis Madrigal.

Private money is flooding into San Francisco’s civic and political life. With the election of Daniel Lurie in 2024, the city’s elite decided that they had someone they knew and trusted in City Hall, and they’ve been extremely generous since then. At least $120 million has flowed to city initiatives since Lurie took office, which is nice. So what’s to worry about?

Critics of all the money flowing into the city from foundations and wealthy individuals say that Lurie is building a political machine that channels money to his preferred projects, ballot measures, and candidates. It sure doesn’t look like old Tammany Hall, which preferred a different kind of public-private partnership, but the money is enormous, and its gravity has allowed Lurie to centralize political power remarkably quickly.

Here to talk about the implications of all this power and money for San Francisco, we’re joined first by JD Morris, City Hall reporter at the San Francisco Chronicle. Hello. Thank you so much for having me.

You had a big story about this recently in the Chronicle, noting the big top-line figure: $120 million for City Hall initiatives. Tell us, who’s the money from, and what’s it being used for?

JD Morris: Well, the first thing I want to emphasize is that $120 million is very much a conservative estimate. I think it’s actually a lot more than that.

A big piece of that money is $60 million for the Downtown Development Corporation, which is focused on revitalizing downtown in a number of ways. They’re also paying for power washing around Union Square and the convention center and things like that. And I think they’ve raised quite a bit more than $60 million, most likely. That’s just the most recent number they’ve put out.

So it’s quite a lot of money. The rest of it is going toward things like the mayor’s Breaking the Cycle initiative, which is all about programs for homelessness and addiction and things like that. Those are really the two biggest pieces of that money.

Some of it also went toward an initiative to temporarily cover the cost of SNAP benefits with Crankstart, Michael Moritz’s family foundation. So there have been some other smaller things.

Alexis Madrigal: Yeah. I mean, is this kind of thing unusual? Did London Breed or Ed Lee engage in similar kinds of efforts?

JD Morris: They did.

Alexis Madrigal: Just less successfully?

JD Morris: Just to a lesser extent, as far as I know.

London Breed and Ed Lee both pursued public-private partnerships. I believe it was Ed Lee who got going a big Salesforce initiative around education. Certainly Daniel Lurie is not the first San Francisco mayor to court investment from the private sector to fund his work.

What I think makes him different, though, is really the emphasis that he has placed on it. This is something that he campaigned on very heavily, saying that he was going to do it once in office. He’s gone so far as to create a whole job in his office that is focused on coordinating public-private partnerships.

So he’s really put this at the top of his agenda in a way that I don’t think previous mayors did.

Alexis Madrigal: Well, he’s also of that world, too, right? I mean, his main credential coming into office was running the philanthropic organization Tipping Point, which tapped this network of donors who seem to have a lot of overlap with the money that’s now going into the city.

JD Morris: Totally. Yeah, this is who Mayor Lurie is.

He made his entire career before becoming San Francisco mayor by courting investment from the private sector to fund Tipping Point, to help anti-poverty initiatives and support people in poverty. So what he’s really done is transition that background into his work at City Hall.

I don’t think that’s surprising at all. You talk to anyone involved in any of these initiatives, and really what they tell you is that Daniel Lurie earned the confidence of the donors to Tipping Point through the work that he did. So it’s not surprising that a lot of those same people want to continue funding what he’s doing at City Hall.

Alexis Madrigal: We’re talking about the influx of private money into San Francisco City Hall. We’re joined by JD Morris, City Hall reporter with the San Francisco Chronicle. It’s a great story that you can read in the Chronicle.

I want to add a couple of other voices to help us contextualize what’s going on here. We’ve got Sarah Anzia, professor of public policy and political science at UC Berkeley and senior fellow at the Hoover Institution. She studies American politics with a focus on state and local governments.

Welcome, Sarah.

Sarah Anzia: All right. Thanks for having me.

Alexis Madrigal: We also have Rob Reich, professor of political science at Stanford University, with courtesy appointments in philosophy, law, and education. He’s also the author — very relevant to this show — of Just Giving: Why Philanthropy Is Failing Democracy and How It Can Do Better.

So, Rob, you’ve been listening to what’s happening here in San Francisco. These dollars are going to initiatives that are quite popular and are things that many San Franciscans would like to see addressed: cleaner streets, help for people with addiction, and support for people who are unhoused.

So what would the concern be, as someone who wrote a book about why philanthropy is failing democracy, about this kind of money heading into government?

Rob Reich: Good morning, Alexis, and thanks for having me.

I’m not opposed to — or I don’t think we as citizens should be opposed to — private wealth playing some role within our city or within democratic institutions. But I think it should be the task of our policies to attempt to do something that will seem quite difficult, which is to domesticate the role of plutocrats so that they serve, rather than subvert, democratic institutions.

The worry with Daniel Lurie would be that he’s effectively taking a page from what you might think was the very successful mayoralty of Michael Bloomberg in New York City. He’s donating his mayoralty to the city. What he can’t get done through the City Council, he’ll simply arrange philanthropically to do in a far less transparent and far less accountable way.

So the concern is not that rich people are playing a role. It’s that they’re playing a role that’s fundamentally and differently accountable than ordinary citizens, whose public institutions are meant to serve all people rather than bend to the will and preferences of the wealthy.

Alexis Madrigal: We did get a statement from Mayor Lurie’s office. Let me give you part of it here.

He says: “By leveraging private dollars, we can act with more urgency and flexibility to make our city more affordable, our streets safer and cleaner, and fuel a broad, durable recovery that reaches every neighborhood. Through public-private partnerships, we are taking on transformational projects like the Embarcadero Park and Powell Street improvement projects, tackling homelessness and addiction through our Breaking the Cycle plan, and responding to immediate crises like ensuring the 112,000 San Franciscans who lost SNAP benefits during the government shutdown still had food on the table. Everyone has a role to play in our city’s continued recovery, and we all want business leaders and companies that succeed in San Francisco to get involved and lean in on sharing that responsibility.”

Alexis Madrigal: JD, I wanted to ask you about the transparency of these different public-private partnerships. Journalists value transparency and have been reporting on this kind of thing for a while. How do you rate the transparency of these arrangements?

JD Morris: Well, they’re certainly following the law. There are forms they’re required to submit — they’re called behested payment forms — anytime the mayor solicits funding from the private sector. Those forms are posted on the city website, and you can find all of them there.

They’ve also been putting out press releases periodically and news stories about the different donors contributing to these initiatives. So we do know, broadly, who’s involved.

But I would say it was difficult for me to piece it all together for my story. This is something I’ve wanted to write about for months and months, and I found it to be an overwhelming amount of information to sort through.

So it’s definitely not always super easy to understand the complete picture, but that’s what I’ve been trying to report on.

Alexis Madrigal: Sarah, let’s bring you into this.

There’s considerable Venn diagram overlap between the people Daniel Lurie knows personally, the Tipping Point donors, the people giving to these civic philanthropic efforts, and the people backing different political initiatives in the city that align with Mayor Lurie’s priorities.

So I think the question is: What’s happening in the city right now? How would you label it? Is it the growth of an interest group? Is it a political machine? Is it just his personal political operation? What do you think?

Sarah Anzia: Yeah, great question.

I think there’s always this concern about money in local politics. A lot of people come into this assuming that when we see this much money, it must be a problem. I think it’s really important, as you suggested, to think about the broader context here, both in terms of whose interests are being served and why Mayor Lurie was elected. What was the status quo before?

I think for many people, the default assumption is, “Well, a lot of these people are very wealthy, and therefore the money they’re spending must be serving the interests of the wealthy.” That’s always a concern. We should always be on the lookout for that. It’s not to say that can never happen.

But I think we should be very careful and ask: When a city gets safer, when the streets are cleaner, when schools get better at teaching kids to read, who benefits? I’d say everyone benefits. The city as a whole benefits. These are collective goods.

It’s also worth remembering that the wealthy have other options. They’re less dependent on government being effective. They can hire private security or move to the suburbs and pay for private school. The people who are most dependent on government are the people who don’t have those choices.

So, to back up, why was Mayor Lurie elected? It’s very tempting now to look at all this money and focus on that. But let’s be honest about it. The city was really struggling and had been struggling. There was a latent demand for this kind of leadership. I think the organization of that latent interest has been a major reason why he’s garnered this support.

The city also faces massive budget deficits right now. It needs to spend more, and it doesn’t have the money. So the question is: Compared to what? What’s the alternative?

I think that’s important context to keep in mind.

Alexis Madrigal: Well, there’s the question of why he got elected, but there’s also the question of how, which is interrelated. Of course, he spent his own money, which other candidates wouldn’t necessarily be able to do.

We’re talking about the influx of private money into San Francisco City Hall. Mayor Daniel Lurie has secured at least $120 million in private funding to back his initiatives.

We’re joined by JD Morris, City Hall reporter with the San Francisco Chronicle. We’ve got Sarah Anzia, professor of public policy and political science at UC Berkeley, and Rob Reich from Stanford.