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[Order Michael Finch’s new book, A Time to Stand: HERE. Prof. Jason Hill calls it “an aesthetic and political tour de force.”]
The Somali fraud in Minnesota had one thing in common beyond the national origin and religion of the perpetrators. The only reason the fraud was possible in the first place is that the state government had outsourced welfare state functions to ‘non-profit’ community groups.
And the non-profits proved to be very profitable for the Somali scammers running them.
The growth of nonprofits has played a major role in the rise of government spending and also fraud. The nonprofit sector now accounts for nearly 1 in 10 jobs and $3.5 trillion in spending.
A survey found “two-thirds of nonprofit organizations report receiving some kind of government grant or contract” with “more than 100,000 nonprofits reporting government grants” to the IRS.
Over 1 out of 3 nonprofits get over 25% of their funding from the government and 1 in 5 get more than 50% of their money from the government. 60% to 80% of non-profits that receive government funds report they would be unable to cover their expenses without taxpayer money.
In Minnesota, the epicenter of Somali fraud, 75% of nonprofits received government funding.
Where did Somalis in the state get the idea to commit massive social welfare fraud? The Somali settler population arrived in America as refugees and saw up close how refugee resettlers, often Catholic and Lutheran, liberal community groups and the rest of the nonprofit sector cashed in.
These welfare groups hired Somalis to act as ‘liaisons’ to their community and provided them with a close up view of how government grants were obtained and money was spent. All they needed were ‘warm bodies’ to act as clients in need of aid. And the Somalis had those.
The Somali ex-refugees decided to cut in on a piece of the action by demanding their own ‘culturally sensitive’ meal, autism and other programming through their own community groups. After running up millions in charges with hardly any pushback, they escalated their fraud to the tens and then hundreds of millions of dollars leading to a fraud count rising into the billions.
Somali fraudsters were just taking advantage of a welfare system in which federal, state and local money was directed to grants for social welfare non-profit groups. Gov. Tim Walz and fellow officials in other states were able to vastly increase state spending on social welfare because most of the money was going to third parties, like the Somali meal providers, autism clinics and homeless advocates, who could get organizations up and running in months.
(And that was especially easy when some of the organizations didn’t actually do anything.)
In the last fiscal year, Minnesota was supposed to have a $17 billion surplus, instead the ‘surplus’ turned into a $6 billion hole because it was used to approve a gargantuan $72 billion budget. Welfare spending grew by 42% in 20 years. Health and Human Services spending, the political piggybank that was raided by the Somali fraudsters, went from a quarter of the budget to around a third. Per person welfare spending rose to around $35,000 per person.
The Minnesota Department of Human Services or the Minnesota Department of Education could not have grown that fast on their own, but what they were really doing wasn’t offering new programs announced by Walz, but managing disbursements to politically connected nonprofits, like the ones involved in the scam, which were able to threaten their personnel with the wrath of Attorney General Keith X. Ellison and other local and state officials if they objected to anything.
While Gov. Tim Walz and other officials claimed that they were implementing ‘programs’, what they were actually doing was building political piggy banks for their allies. Fraud was baked in because the real purpose of outsourcing what were supposed to be government programs to third parties was to subsidize the ‘community groups’ that turn out voters for their campaigns.
The nationwide networks of community groups are really a voter outreach and turnout operation for the Democratic Party funded with taxpayer money. For an example of how that worked, consider the role that one single non-profit played in the political careers of Kamala Harris, the former vice president, and Gov. Gavin Newsom, a likely presidential candidate.
In 1983, the San Francisco League of Urban Gardeners or as it was more commonly known by its cutesy acronym, SLUG, was created as a non-profit to help the city’s community gardens. By the 1990s, it had been taken over by Mohammed Nuru: an ally of former Mayor Willie Brown.
SLUG employees were told they would have to vote for Brown if they wanted to keep their jobs and they later testified that they were told they would have to cast absentee ballots for Newsom in vans organized by Kamala’s campaign while crew chiefs peered over their shoulders. While this was going on SLUG was getting $6 million in local and federal funds.
And what that $6 million was really buying was a voter turnout operation for Gavin Newsom.
Most community groups however don’t need to do anything as crude as that. They just employ the ‘activists’ who show up at rallies for every leftist cause. They help register the right sorts of voters from the right sorts of minority groups likely to vote for their candidates.
Government welfare programs largely employ unionized leftists involved in activism whose dues go to leftist politicians, but government grants provide even more opportunities for embedding voter turnout and mobilization programs within minority groups while providing them with targeted funding as incentives to aid the political agendas of the Democrats and the Left.
Free lunches in schools could have only done so much for the Democrats, but by unleashing hundreds of millions in ‘culturally sensitive’ food funding to Somali providers, the Walz administration was able to directly fund activists who would be able to turn out the vote.
And another advantage of third-party non-profits is that oversight over them was negligible.
Government employees have transparency and freedom of information act requirements. A government employee would find it somewhat more difficult to only offer services to Somalis. However the Somali community groups that the money was directed to were able to operate with minimal scrutiny until the scandal grew so large that it attracted nationwide attention.
The billions in fraud in Minnesota should be a wake-up call about the catastrophic growth of government funded non-profits. If government officials want to offer a program, they should do it ‘in-house’, rather than outsourcing it to their political allies who are non-profits in name only.
Apart from hospitals providing medical services, government funding of non-profits should end.
If government officials want to offer ‘free day care’, they’ll need to figure out how to do it themselves even if it involves Gov. Tim Walz playing babysitter, if they want to provide help for the homeless or any other welfare service, it should be handled by government offices. The government is incredibly wasteful, but there are limits to how much money it can steal, as Minnesota’s Somali scammers showed us, there’s no limit to how much non-profits can steal.
Stop the Government Funding of the Global Warming, Climate Change scam artists Brainwashing the youth with this Global Warming/Climate Change scam
Stop the government funding of all of these constructs.
They are all phony.
I doubt they are getting money from the government at this point, but the International Fellowship of Christians and Jews has to be the the counter to the Southern Poverty Law Center. We know the latter is a get rich scheme – only a matter of time before more realize the the former is no different.
I bet that woman is making a fortune.
The ads on the Sell’em Network make me cringe.
If people ignored these organizations they would dry up and blow away.
Government spending on interests adverse to the US through non-profits as described here is small change compared to the amount of $ distributed by the government for the invasion of our borders by migrants.
Inquiries through Grok reveal DHS grants of $641 million to such NGO’s as Catholic Charities in FY 2024..
Additionally in FY 2024, Congress provided around $3.9 billion in base funding for Migration and Refugee Assistance (MRA).
This is our government working against us.
Did your congressman vote for this?
Republicans just joined Democrats in defeating a bill that would have stopped NGO funding. How much money was spread around both parties by NGOs to get that to happen. The US government is correct beyond redemption.
NGOs should not exist period.
Organisations are either Government and therefore accountable to the people, they are businesses that are accountable to their shareholders or they are charities accountable to the people they help.
Anything else is corruption in plain sight.
Part of our failed education system – the students are brainwashed into BELIEVING that non-profits are the source of sweetness and light.
As one involved in a involuntary non-profit – there is nothing good about non-profit organizations.
Of course, the government subsidized non-profits are great fun for the administrators of the .org.
No shareholders asking questions – just found money to do with as you please.
Who could ask for more?
My opinion is that if the government can’t do its job without using NGOs, non-profits, church charities, or think tanks, then the government is too large and needs to be cut.
Think Tanks! What is the point of them? To Think? Of course no government is capable of thinking for itself.
ALL non-profits should operate WITHIN their means and do the WORK to appeal to the community to keep the lights on. I used to work at a Crisis Pregnancy Center – a church-based operation that served our community. We had THREE full-time employees and scads of trained VOLUNTEERS that donated their time to help women in crisis situations. We operated on a very tight budget until one of our annual banquet speakers managed to get the local church community to see the light and then their donations climbed to the point that the Board decided to purchase an “ultrasound bus” so we could reach more of the community. The Board took their time deciding what to do with the money, STAYED within their regular budget (pledges don’t always come through as promised), and WHEN the money came in, made the purchase. That was 15 years ago and they are STILL going strong and using the DONATED money wisely. That is what a “non-profit” SHOULD be doing, grants or not. NO TAXPAYER MONEY should be going to such operations. IF there is truly a NEED for such operation, then the staff needs to do the HARD WORK of getting the community that is interested in supporting the ministry. Otherwise, it should go by the wayside plain and simple.
Sad to see the noble non-profits fall. My Mom was involved in spiritual non-profits so I got to see that from the inside all my life. The inefficiency drove me crazy. I can’t remember specifics, but I seem to remember there was something about sorting and searching where they just didn’t get the concept. Now, thinking back, all the good things they did come flooding into my memory.
For decades people have started nonprofits. Then, they go buy a Lexus, as befits their station in life..
I worked for two nonprofits (in the course of my employment history that helped people with developmental disabilities). They did very good work, but their politics were leftist and they indoctrinated the staff.
With one of them, at Christmas, those of us who worked out in the field, received a $500 bonus.
Supervisors got $3,000. Director of Operations got $5,000. I don’t know if the head boss took a bonus.
I asked my supervisor, “Why am I getting a bonus.” He told me there was unspent money on hand and it had to be spent so there was no money when they submitted the next budget. More money was going to be requested.
THE MONEY IS FOR THE PEOPLE WHO ARE BEING HELPED.
But, what do I know ?
I worked at non profits that were funded by government grants and the last day of their fiscal year March 31st was called Christmas because any money from that fiscal year’s govt grant left over after that date had to be returned so during the last week of the fiscal year the non profit management and board went on a spending spree — who needs new laptops or phones or fancy office furntiture or overseas conference air tickets and so on until every penny was spent — not one cent was ever spent on frontline work or client services improvement. I was appalled every year by “non profit Christmas”. I later worked as Executive Director of a small and unique mental health program that I re-structured into an accountable health care service (and not the leftwing politicized vague “community agency” it had been for 20 years) and I spent my 10 years there fighting the far left volunteer board (whose members changed every year) and the radical self-entitled unionized staff (of 6 people) to try to cut the staff pork and board waste, focus on the clients only and stop the woke. The board hated me but the clients loved me (you’re actually helping us). The board finally drove me out when I refused to do daily “Indian smudge ceremonies of land acknowledgement to atone for white colonialism” by forcing me into early retirement the day I turned 60 or be fired. When asked by the board if I had any parting words I said, The epitaph of my entire non profit career can be summed up by an old saying: The road to hell is paved with good intentions. They all glared at me as I walked out with my board policy buy out 10 months’ early retirement severance pay. Despite many small acts of usefulness to clients over the years (that I knew could happen just as effectively by family, friends and neighbours for free as they did for centuries) almost all non profits, “charities” and government “programs” exist for the financial and professional benefit of the staff (esp management) and for the power and status of their careerist and agenda driven volunteer boards. But the public buys the non profit and “charity” PR so the farce goes on and on wearing public goodwill as a skin suit.
We need to ban the federal government from operating charity programs. The government politicizes services, delays delivery, over- spends, and does not evaluate the effectiveness/outcomes of its services. The private sector in partnership with the volunteer sector, does a much better job.
A sure way for your non profit to become profitable is to secure government funding. Oh, the books will show the organization operating on a shoestring but the salaries of those at the top will be 6 figures and the first figure will not be a 1.
Daniel is the best reporter in the country… Bless you;
The scope of this plundering of our public treasury is SICKENING
Is an organization actually a “non-governmental organization” if it can’t even exist without government funds?
Keep functioning ,splendid job!