Los Angeles County officials and local watchdogs are intensifying scrutiny of nonprofit organizations delivering homeless services, as public funding for these groups has surged following the passage of Measure A, a half-cent sales tax approved by voters to address homelessness.
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The debate centers on whether taxpayer dollars are being managed effectively, with critics pointing to a lack of transparency and oversight in the sprawling network of nonprofits receiving government grants.
Measure A, which took effect in April after being approved by voters in November, replaced a previous quarter-cent sales tax and is expected to generate hundreds of millions of dollars annually for homeless housing and services across the county, according to the county’s official Measure A information. The Los Angeles Homeless Services Authority (LAHSA), a joint city-county agency, has historically distributed these funds to more than 100 nonprofit partner agencies.
Nonprofit Growth and Funding Sources
One of the largest recipients, Special Service for Groups (SSG), reported over $264 million in revenue for the fiscal year ending in June, with approximately $260 million—98.5 percent—coming from government grants, according to its IRS Form 990. SSG’s revenue has grown rapidly in recent years, jumping from $167 million to $264 million in just three years, a trend that accelerated after Measure H and Measure A increased available funding for homeless services.
SSG’s operations span a wide range of services, including behavioral health, HIV/AIDS support, and homeless initiatives. The organization’s divisions, such as the Asian and Pacific Islander Forward Movement and Access to Prevention Advocacy Intervention & Treatment, target specific community needs. SSG has also acquired properties, including a former motel in South Los Angeles intended for conversion into supportive housing, but the project has stalled for years, leaving the site gutted and fenced off while awaiting additional funding.
Oversight Failures and Fraud Allegations
Concerns about oversight have intensified following revelations that SSG and LAHSA paid public funds to two corporations controlled by Alexander Soofer, a Los Angeles businessman now awaiting trial on state and federal fraud charges. Prosecutors allege Soofer diverted $10 million in public funds meant for homeless services to personal use, including luxury travel and a $7 million home. SSG’s financial disclosures show it passed public funds to Soofer’s for-profit and nonprofit entities for several years, with no apparent awareness of the distinction between the two corporations.
"Distributing millions of dollars a year in public funds, they appear to have had no idea who they were paying."
— Chris Bray, senior correspondent at The Federalist
Efforts by reporters to obtain comment from SSG and LAHSA were unsuccessful. SSG’s listed media contact did not respond, and an email to Executive Director Herbert Hatanaka was blocked. A reporter was also denied access when visiting SSG’s headquarters in person.
County Officials Demand Reform
Los Angeles County Supervisor Lindsey P. Horvath has publicly criticized LAHSA’s financial management, calling for the county to withdraw taxpayer funds from the agency and demanding a forensic audit. In a statement after a recent LAHSA Finance Committee meeting, Horvath said, “Accountability and transparency are long overdue and will finally be delivered through the reforms we’ve ushered in.” She cited LAHSA’s inability to pay service providers, refusal of county staff assistance, and failure to provide real-time financial information to commissioners as evidence of systemic problems. Read Horvath’s full statement.
Horvath has called for a public hearing, immediate payment of outstanding invoices, and the embedding of county auditors at LAHSA. County dollars are set to remain with LAHSA until July, after which new oversight structures are expected to take effect.
Broader Context and Next Steps
The rapid expansion of public funding for homeless services in Los Angeles has brought increased attention to how nonprofit partners are selected and monitored. While Measure A includes provisions for regional planning and performance metrics, critics argue that the current system lacks sufficient safeguards to ensure accountability. Supporters of the reforms say new oversight measures are being implemented, but officials and advocates remain divided over the pace and effectiveness of these changes.
LAHSA and SSG have not publicly addressed the recent criticism or detailed how they plan to improve oversight. The county Board of Supervisors is expected to hold a public hearing on the matter, and a forensic audit of LAHSA’s finances is pending.
