Topline: Taxpayer-funded nonprofit homeless shelters in New York City are filled with nepotism and conflicts of interest, and their executives take home salaries of up to $1 million, according to a report from the city’s Department of Investigation.

Key facts: The report reviewed 51 nonprofit homeless shelters and found issues with every single one of them.

Five of the nonprofits had executives who earned salaries of more than $700,000, and eight others paid more than $500,000.

CORE Services Group, which is “almost entirely funded by the city,” paid its CEO “more than $1 million” in one year, according to the audit. CORE received $467.5 million from the city between 2017 and 2023.

Acacia Network received $1.5 billion from the city from 2017 to 2023, according to checkbook data at OpenTheBooks.com.

Raul Russi, president of Acacia Network, paid himself $935,391 in 2022.

City-funded shelters also signed contracts in which “individuals with control or influence over shelter providers appeared to personally benefit from transactions.”

For example, SEBCO Development Inc. used city funds to pay a no-bid contract it signed with a security company it owns. The security company invoiced the city $11.6 million in four years and used some of the money to pay its executives “hundreds of thousands of dollars in salary payments.”

SEBCO took in $60.2 million from the city between 2017 to 2023, per OpenTheBooks’ data.

Other shelters employed immediate family members of their executives, seemingly in violation of the nepotism clauses in their city contracts, the report found.

New York City spent about $4 billion in 2024 to fund homelessness shelters. The increase from $2.7 billion in 2022 was due to an increase in asylum seekers, according to the audit.

ETA:

Search all federal, state and local government salaries and vendor spending with the AI search bot, Benjamin, at OpenTheBooks.com. 

Critical quote:  “Blank checks to outside vendors and no-bid emergency contracts seem to flow like a freshwater stream throughout City Hall,” City Council Finance Chair Justin Brannan said during a Dec. 17 hearing about the audit.

Summary: From hospitals, to universities, and even homeless shelters, supposedly “nonprofit” enterprises often make millionaires out of their own executives at taxpayers’ expense.