Nonprofits tell Ethics Commission the draft gift rules risk a 'chilling effect' and urge a racial equity scan

During the extended public-comment period, many nonprofit leaders and city staff urged the Ethics Commission to reconsider elements of the draft ordinance and the proposed regulations that would broaden the restricted-source definition and create liability for gift givers.

Speakers representing homeless services, arts and cultural organizations and environmental nonprofits described real-world operational reasons city officials attend nonprofit events, including the need for department representatives to learn about services, monitor facilities and signal public support to donors. Mary Kate Bacalau (Compass Family Services) and Kathy Lowry (Larkin Street Youth Services) said nonprofit fundraisers and modest in-kind gestures are essential to survival for many providers and warned that treating small courtesies as gifts without a reasonable de minimis threshold would be punitive.

Multiple commenters urged a racial equity scan before the Commission finalizes language. "There has still not been a racial equity scan of this proposed ordinance," said Shawn Rosen Moss (San Francisco Department of the Environment); other callers said the meeting scheduling and voluminous materials made sustained participation difficult for small volunteer-run groups.

Nonprofit leaders proposed targeted fixes: carve-outs or adjusted liability for uncompensated nonprofit board members; clearer exceptions when an official attends an event to perform a public role (speech, ceremonial recognition or to represent the city); and retaining a reasonable de minimis toleration for modest items or office courtesies. Several suggested staff assess models used by other large cities and explore exemptions for small human-services providers that file abbreviated IRS/electronic filings.

Commissioners echoed the need to avoid unintended consequences and directed staff to continue meet-and-confer outreach, to prepare clarified regulatory language or options (including potential exemptions) and to publish additional FAQs to address specific public concerns. The Commission did not adopt final regulatory text at this meeting and asked staff to return with revised options. The meeting included formal votes to enter closed session and not to disclose closed-session deliberations.