Los Angeles is drowning in government-funded nonprofits, and a new report from The Federalist uses one organization to show just how deep the money goes—and how little oversight comes with it.
Special Service for Groups (SSG), a sprawling nonprofit corporation with divisions spanning behavioral health, HIV/AIDS services, anti-hate programs, and homeless assistance, pulled in just over $264 million in revenue in fiscal year 2025. Of that, roughly $260 million—about 98.5 percent—came from government grants, according to the organization’s Form 990 filing with the IRS.
That makes SSG, in practice, a government agency without actually being one. It spends public money but operates under corporate transparency rules, meaning it is not subject to the California Public Records Act or the state’s open-meeting law for local governments, The Federalist notes.
One Nonprofit Among Many
SSG is just one of more than 100 nonprofit partner agencies funded by the Los Angeles Homeless Services Authority (LAHSA), the county-city joint powers authority that has been largely abandoned by county officials over concerns about effectiveness, financial transparency, and operational competence, according to The Federalist.
The nonprofit’s reach is wide. Under its umbrella sit the Asian and Pacific Islander Forward Movement, which focuses on community health and environmental justice, and Access to Prevention Advocacy Intervention & Treatment, which provides services to people at risk for or living with HIV/AIDS. But SSG has increasingly pushed into homeless services, where the big public dollars flow.
That growth has been explosive. In 2006, SSG received about $23 million in government grants, and about $26 million overall. By 2016, government grants had grown to roughly $53 million. Then came 2019, after Los Angeles County voters passed the Measure H sales tax increase for homeless services in 2017—and SSG’s government grants jumped to about $108 million.
After voters approved the larger Measure A sales tax increase in 2024, SSG’s annual revenue jumped by more than $50 million in a single year, according to ProPublica’s Nonprofit Explorer data cited by The Federalist. Between fiscal years 2023 and 2025, SSG’s revenue climbed from roughly $167 million to $264 million—a nonprofit that had just $26 million in revenue a decade earlier.
A Gutted Motel and a Fraud Case
As SSG has grown into homeless services, questions have emerged about whether it has expanded beyond its expertise. With close to $8.5 million in city, state, and foundation funding, SSG now owns a former motel in South Los Angeles that it plans to convert into supportive housing. But six years after the city bought the property and transferred it to SSG, the motel—which was still operating and hosting guests when it was taken over—now sits stripped, gutted, and surrounded by a security fence, according to The Federalist. City officials have given SSG extra time to find more funding to start the project.
More troubling is SSG’s years-long financial relationship with Alexander Soofer, a Los Angeles businessman now awaiting trial in state and federal courts on a long list of fraud charges. Prosecutors allege Soofer diverted $10 million in public funds intended for homeless services into his personal accounts, using the money for luxury travel and a $7 million house.
The Federalist points to reporting from LAist that flagged a key detail: Soofer had two corporations with similar names—Abundant Blessings, a nonprofit, and Abundant Blessings from Above, a for-profit corporation. Both LAHSA and SSG paid public funds to both entities for services like transitional housing. But SSG’s Form 990 filings, for several years running, list payments to “Abundant Blessings from Above” as going to a 501(c)(3). That was never true, The Federalist reports.
In other words, for years, SSG reported to the IRS that it was passing through public dollars to a nonprofit—when the recipient was actually a for-profit corporation. The implication, The Federalist writes, is that SSG and LAHSA were distributing millions of dollars a year in public funds without knowing who they were paying.
No Answers From SSG
The Federalist said it made significant efforts to discuss SSG’s use of public funds with the organization and LAHSA. The media contact listed on SSG’s website—an executive at a private public relations firm—did not respond to messages. An email to SSG Executive Director Herbert Hatanaka was blocked by the organization’s email system. A reporter who tried to visit SSG headquarters in person was denied access to the office.
The broader picture, as The Federalist frames it, is of a vast system where public money flows through private corporations with limited transparency obligations—and where the scale of funding has outpaced oversight. LAHSA alone funds more than 100 nonprofit partner agencies across Los Angeles County, each one a potential conduit for taxpayer dollars with fewer accountability requirements than a government agency would face.
SSG, with its $260 million in annual taxpayer funding, a gutted motel, and a major financial partner awaiting trial on fraud charges, offers a case study in what can go wrong when public funds move through private hands—and how little the public may be able to see about where that money goes.
Source: thefederalist.com — https://thefederalist.com/2026/09/09/homelessness-non-profits-are-killing-los-angeles/