BigMoneySF: How one group quickly became the 800-pound gorilla of SF politics

Of the bevy of billionaire-backed pressure groups that have mushroomed in San Francisco, excoriating progressives for urban ills from drug-infested streets to sclerotic housing production, one stands head and shoulders above the rest.

Neighbors for a Better San Francisco Advocacy, the group launched in 2020 and backed largely by real estate and technology money, has in short order become the most well-funded, top-spending organization active in San Francisco politics.

It supplied the majority of the spending to recall then-District Attorney Chesa Boudin in 2022, and was the No. 1 spender in the school-board recalls that same year. Neighbors alone accounted for more than one of every $10 spent in San Francisco political campaigns between 2020 and 2024 — at least $8.7 million of $80.3 million total, according to an analysis of campaign finance data.

The group, a “social welfare” nonprofit founded by two Realtor lobbyists and backed by Republican mega-donors, almost exclusively spends on law-and-order causes, backing tough-on-crime policies and candidates far more than housing, transit or other policy issues. 

While the group was initially focused on supervisorial races, it quickly expanded and successfully funneled millions to recall the district attorney, reverse criminal justice reforms, fight alternatives to incarceration and bolster the police department.

“They’re the big political player on the center-right in San Francisco politics,” said Jim Ross, a political consultant who knows Neighbors’ muscle well: He was the anti-recall campaign consultant for Boudin, and saw the effects of the group’s spending first-hand.

Data from the San Francisco Ethics Commission, California secretary of state’s office, the Internal Revenue Service, and other sources. Chart by Will Jarrett and updated by Kelly Waldron.

“For moderates or conservatives, there’s no group that has the consistent political reach of Neighbors,” Ross continued. “And, after the recall, you have to say: Effective reach.” 

Eric Jaye, another longtime consultant, saw it more pointedly: “You have a group of the wealthiest people on the planet saying that they want to take control of our city,” he said. “Do these handful of billionaires and tech folks own it, or do we? It’s not more complicated than that.”

None of Neighbors’ leaders responded to multiple requests for comment for this piece.

Led by Realtors and Republican donors

Neighbors for a Better San Francisco was started in 2020 by two lobbyists with the San Francisco Association of Realtors: Mary Jung, the group’s director of government relations, and Jay Cheng, its deputy director of government relations and a Jung protege. 

Its leadership is a medley of wealthy political donors. William Oberndorf, the billionaire hedge-fund manager and Republican mega-donor, is the group’s biggest patron, a co-director, and the president of its associated nonprofit charity. 

Oberndorf has donated at least $13 million to Republicans for decades, going back to George H. W. Bush, according to Federal Election Commission records. He has given about $250,000 to Democrats in that same timeframe. He is a major proponent of charter schools, and has sought to limit the power of teachers’ unions. He has given Neighbors at least $1 million. 

Louise Muhlfeld Patterson is also a co-director of the group. Going back to 2007, she has spent tens of thousands to back federal candidates, though she has given largely to Democrats; she has donated at least $830,346 to Neighbors. Her husband, Arthur Patterson, is a longtime venture capitalist and the director of Neighbors’ associated charity. He has spent at least $250,000 on federal elections, largely benefitting Republicans. 

Steven Merrill, another venture capitalist and also a director of the group, has spent heavily on politics, funding both Republicans and Democrats. He has given Neighbors at least $535,001.

Then there is Nick Podell, the president of Neighbors and a developer behind one of the Mission District’s largest — and most controversial — housing projects, the 196-unit project at 2000 Bryant St. The project was opposed by neighborhood activists, but in 2016 Podell managed to work out a deal by donating a sizable portion of his land to the city for it to develop affordable housing, equivalent to some 41 percent of the total housing units, which was a record at the time. 

Podell is not a significant donor to Neighbors — he has given at least $10,000 — but is, at least nominally, a top leader. 

Neighbors has dozens of other donors, most of them hailing from tech, real estate and banking. Jaye, for his part, sees the group simply: An alliance of the nouveau riche from Silicon Valley with traditional downtown real estate interests, spending far, far more money than before.

“They used to organize $2-3 million,” said Jaye of past campaign donors. “Now it’s going to be $20 or $30 million. It’s an order of magnitude difference.” 

Neighbors has become SF’s biggest political spender

Since 2020, Neighbors has spent at least $14.5 million on political campaigns across California, with the bulk of it (at least $8.7 million) directed to San Francisco races, according to state and local campaign finance filings. The group’s associated nonprofit charity, which cannot support candidates directly, spent another $2.7 million in 2021 and 2022, according to federal tax documents; spending for 2023 has not yet been released.

Besides the vaping company Juul, which between 2019 and 2021 paid out gobs of cash to defeat the city’s e-cigarette ban but was trounced in its attempt, Neighbors has been the largest single spender in San Francisco politics since it arrived on the scene in 2020, according to an analysis of city campaign finance data. 

Neighbors has received more money than any other political action committee active in San Francisco politics since Aug. 1, 2022, according to the San Francisco Ethics Commission, which lists local PACs in order of the contributions they have received. Neighbors’ total contributions over the past two years — at least $4.1 million — are four times that of the next largest PAC, another tech-backed effort by the moderate-leaning group AbundantSF.

Ross described Neighbors as a “donor-advised fund for politics” — that is, unlike other advocacy groups that have emerged in the city in recent years, Neighbors is largely a conduit for the wealthy to direct their funds. It is not a membership organization, and does not host happy hours, trash pick-ups, or leadership trainings to attract or develop new supporters — though it does fund groups that do so. 

It is, instead, focused on soliciting money from well-heeled donors and spending it on a vast scale.

To do so, Neighbors, like many advocacy groups, exists as two associated nonprofits: Its 501(c)(4) “social welfare” organization can take in unlimited funds, and spend those directly on political campaigns, so long as that is not its “primary” activity — generally meaning less than 50 percent of the group’s expenditures.

Neighbors does the bulk of its giving through this social welfare nonprofit, which, per California law, is treated as a PAC and discloses its political contributions in state and local campaign filings; the group also has an associated 501(c)(3) “public charity” nonprofit.

Every Neighbors’ contribution since 2020

Data from the San Francisco Ethics Commission and California secretary of state’s office. Chart by Kelly Waldron.

Group’s biggest spends have been pro-police

Neighbors is not the biggest political spender in San Francisco history. Vast sums have been poured into the city’s races by groups like the American Beverage Association ($31.8 million to unsuccessfully fight the city’s soda tax) or Juul ($22.6 million against the e-cigarette ban).

But such exorbitantly expensive campaigns have tended to be one-off corporate efforts, funded heavily to fight a business threat during an election season or two. Neighbors, by contrast, stands out not only for its heft, but its potential for longevity: With a well-connected political staff, it can solicit and spend money for years to come, backing a panoply of policies that suit donors’ ideological goals.

In the last four years, Neighbors has given money to voter guides, local Democratic Party clubs, and other nonprofits, sometimes pushing liberal policies like transit bonds, permit streamlining, and affirmative action.

Its biggest expenditure by far, however, has been on law enforcement and public safety: Neighbors contributed the majority of the money to the expensive 2022 recall of Boudin, giving at least $4.7 million — the group’s largest spend. The Boudin recall reversed a nascent effort at criminal-justice reform in San Francisco, ushering in new district attorney Brooke Jenkins — who has dismissed all her predecessor’s charges against cops, decreased the rate of diversions, and induced the exodus of dozens of staffers from her office.

Neighbors for a Better SF spent more on law and order issues than anything else

Reported contributions from 2020 to 2024.

Spending was categorized by Mission Local. Data from the San Francisco Ethics Commission and California secretary of state’s office. Chart by Kelly Waldron.

Neighbors’ sister charity paid Jenkins a six-figure sum for “consulting” while she served as a volunteer spokesperson for the recall, a possible violation of campaign finance rules. Both the IRS and California attorney general’s office were asked to investigate, but the status of those investigations is unclear.

Neighbors also heavily financed the 2022 school board recall, becoming the campaign’s chief financier, and has spent more than $500,000 bankrolling a group reportedly influential in the 2022 redistricting efforts, which benefitted moderate candidates.

In the March 5 election, Neighbors spent at least $966,000 in San Francisco, largely to defeat Proposition B, the police measure opposed by Mayor London Breed for tying staffing increases to future revenue; the mayor wanted increased staffing from general funds. The proposition lost 72 to 28 percent.

The group is not slowing down: For the November 2024 election, Neighbors has already contributed $400,000 to an effort to expand mayoral power. Two ballot measures, backed by Neighbors but proposed by the allied group TogetherSF, aim to limit the number of city commissions and give the mayor more firing and hiring power, among other changes.

It would be the biggest change to mayoral authority since the early 2000s, when voters passed a series of propositions giving the Board of Supervisors a minority of appointments on some city commissions. The shifts were a reaction to Mayor Willie Brown’s two terms in office, during which he was able to flood City Hall with allies and apparatchiks.

The TogetherSF measures for this November, which have not yet qualified for the ballot, have already seen more than $2.1 million in funding. About half of that sum comes from a single source: Michael Moritz, the billionaire journalist-turned-investor who has poured at least $2.3 million into the city’s political campaigns since 2003, and is the top patron of both TogetherSF and the San Francisco Standard.

“He’s clearly looking at: How do I get at the root challenges of governing San Francisco?” said Ross of Moritz’s focus. “I don’t know if his policies are going to have that achievement … but he’s clearly going after long-term structural change.”

It’s all in the family

The interests of Moritz, TogetherSF, the entity he funds, and Neighbors often coincide. After all, the founder and head of TogetherSF, Kanishka Cheng, is married to Jay Cheng, the head of Neighbors. She is a former aide to both Breed and District 2 supervisor Mark Farrell, a leading challenger for mayor, and both TogetherSF and Neighbors are expected to back Farrell.

“I don’t perceive that there’s a lot of light between Kanishka and Jay Cheng,” said Jaye. 

“Whatever organizational influence and heft they have, they are going to be supporting efforts that blatantly support Mark Farrell, or indirectly support Mark Farrell,” predicted one longtime political consultant. “They are not going to be lifting a finger for London Breed.”

Still others said donors may sidestep the issue and fund an “anyone but Peskin” effort, referring to Board President Aaron Peskin, who threw his hat in the ring earlier this month.

“Aaron Peskin is a huge lightning rod,” said another political consultant, who also wished to remain anonymous. Neighbors’ donors, he said, are “really fractured” over who to support, but “Peskin may be the unifying force.”

“At the end of it all, they really don’t want Peskin,” he said.

And, added Ross, Neighbors may yet return to its roots, spending heavily in an attempt to keep progressives from controlling the Board of Supervisors in a year with six district races, including two with incumbent progressives, Connie Chan and Dean Preston. 

“They’re going to play big in the mayor’s race, but they may take a bigger role in the supervisors’ races,” Ross said. Neighbors and other big money groups, Ross said, will devote “a lot of spending” to ensure that both branches of the city’s government — the mayor’s office and the board — stay out of progressive hands.

And, for both efforts, Neighbors is flush with cash: The group had, as of the end of February, a $1.9 million war chest heading into November — an amount that is certain to snowball ahead of the election. 

Neighbors started by fighting progressive supes

In the first weeks of its existence, between early September 2020 and the Nov. 3 election that year, Neighbors for a Better San Francisco flooded local elections with almost $3 million in spending. 

The group filed to become a political action committee on Sept. 14, 2020, and in a month amassed more than $3 million from nearly 60 donors. Some of the biggest: Ripple CEO Chris Larsen ($300,000), real estate investor David DeWilde ($100,000), hotel billionaire John Pritzker ($300,000), tech investor Christopher James ($200,000), and Moritz ($300,000), among many others.

Neighbors did not spend exclusively in San Francisco: Regionally, it funded progressive campaigns, like an effort to boost Caltrain’s funding by $100 million a year ($196,000), and sometimes did the same at the state level, seeking to restore affirmative action in California ($446,000). But it also fought a reform of Proposition 13 that would have increased taxes on land-holding businesses ($100,000).

While these donations are, at first blush, counterintuitive, one potential explanation is that the real “get” for Neighbors is that the donation to a state ballot proposition funded a local slate card. As such, an agreeable local slate card was produced, but the donation on San Francisco ethics forms recorded a give to a state measure.

Regardless, Neighbors’ biggest expenses were local, partly attempting to stop a real estate tax ($239,500) and fund a homelessness bond ($104,050), but largely centered on fighting progressive supervisorial candidates. It led a million-dollar campaign in four contested district races where progressives looked to make gains, further entrenching their hold on the Board of Supervisors.

To do so, Neighbors funded a political action committee called the SF Workforce Housing Alliance to the tune of $843,000. The PAC was led by Todd David, the former campaign manager to Sen. Scott Wiener. David is a longtime YIMBY, and is now the head of AbundantSF, which has promised to spend millions in local races in the coming years.

The Neighbors PAC was aggressive, taking out ads lambasting progressive candidates as “radical” and “extreme,” seeking to blame them for homelessness, high housing costs, and crime. In mailers, it derided Connie Chan, running in District 1, as “Encampment Connie,” and implied that she would preside over business closures and car break-ins. It called Vilaska Nguyen, who ran in District 7, a “Lyin’ King” and photoshopped his face atop the Disney cartoon lion.

John Avalos, the former District 11 supervisor who was fined for campaign finance violations stemming from his 2011 mayoral bid, was dubbed an “ethics abuser” and “John A-Violator.” On ads, the PAC mocked up a mugshot of his face.

In one ad against Dean Preston, whom the PAC spent at least $235,000 to defeat — the most on any candidate race — the PAC implied Bernie Sanders had called the candidate’s housing plan “a racist legacy” of Jim Crow. Sanders had not commented on Preston’s policies in particular and, in fact, endorsed the candidate, a fellow democratic socialist. 

The PAC also showed before-and-after photos implying Preston seeded the district with homeless encampments after handing out tents to the unhoused. The “before” photos showed the Painted Ladies on a sunny day and behind a clean street; the “after” ones, a trash-strewn sidewalk encampment — but in a completely different part of the city. 

Still, despite the spending, Neighbors’ preferred candidates lost three of their four races.

Preston and Chan won in their districts, beating Neighbors-backed Vallie Brown and Marjan Philhour. Nguyen lost, but so, too, did the group’s preferred candidate in District 7, Joel Engardio; Myrna Melgar took home the seat. 

Avalos did not gain a third term in District 11 — Ahsha Safaí won there. But the Neighbors PAC did not support Safaí with significant funds, and this turned out to be a Pyrrhic victory, as Safaí has since tacked to the left in a mayoral bid of his own. 

“That was not a particularly successful election cycle,” admits David, who ran the independent expenditure campaign. There was, he said, “a lot of learning by losing,” but since then, Neighbors has “gotten much more sophisticated in a very short period of time.”

And, David added, the group can afford to do so, given deep-pocketed benefactors.

“They’re an organization that has the resources to be able to do that,” he said. “One failed election cycle does not dry up their funding. They can learn on the job.”

Group’s reputation was built on recalls

At the end of 2020, after an unsuccessful attempt to remake the Board of Supervisors, Neighbors had $356,000 cash on hand — money that needed a purpose.

“They had a bunch of money left over, and that money was just sitting there waiting for someone to do something with it,” said a political consultant who has kept a close eye on the group. “And Mary Jung was in control of it.”

Boudin was sworn in on Jan. 8, 2020. Within a year, on Jan. 1, 2021, a Republican-led recall petition had started that quickly gained thousands of signatures and national notoriety. Jung jumped on board.

On March 11, 2021, articles of incorporation were submitted for both a 501(c)(3) and a 501(c)(4) under the names “Neighbors for a Better San Francisco” and “Neighbors for a Better San Francisco Advocacy.” A month later, on April 19, Jung and others started a second, separate recall petition — and began collecting checks for its passage via the newly formed entities.

Neighbors did not accept any donations in the first half of 2021, campaign finance filings show, until a flurry of activity in June aimed at a single target: Boudin. In June, it took in $720,000 from nine big-money donors — like San Francisco heiresses Diane “Dede” Wilsey and Miriam “Mimi” Hass, Daniel Lurie’s mother — and spent that money almost as quickly, funneling $530,000 that same month to PACs supporting the recall. 

As the recall proceeded over the next 12 months, it continued amassing and spending funds at a rapid clip. Boudin faced an uphill battle: When he was elected in a low-turnout race, he got just 36 percent of first-round votes, but won after his opponents failed to coordinate a ranked-choice strategy. 

The same was not true of the recall. Neighbors’ avalanche of money — they outspent recall opponents 2-to-1 — ushered in Boudin’s defeat; he lost 55-45 in an up-or-down vote. The more than $4.7 million spent to oust the DA was, by far, the group’s largest and most consequential expenditure. In undoing the victory of San Francisco’s most left-leaning district attorney, it cemented its credibility.

The school board recalls that year were also a notch in Neighbors’ belt — although those closely involved in the recall say the group’s funding, while welcome, was not a driving force in the campaign. Rather, Neighbors and other wealthy donors hitched their wagon to a rocketship, and garnered acclaim afterwards: The entirety of Neighbors’ $488,800 in spending on the school board recalls came in just the five weeks before the election.

Recall proponents outspent opponents by a ratio of 24 to 1. 

“They all kind of jumped on the bandwagon once things were already in motion,” said a political consultant close to the school board recalls. “Did they get in and help? Absolutely, but they haven’t created their own opportunities for success yet.”

Now, Neighbors is seeking to change both branches of city government

This year’s election will test Neighbors’ ability to defeat progressive candidates and consolidate power. Neighbors’ giving, so far in 2024, has been centered on public safety once again, opposing Proposition B on the March 5 ballot and supporting Proposition E, which allows for looser rules around police chases, surveillance, and looser oversight of police use of force — in line with Breed’s wishes. 

But, though the March 5 election brought Neighbors and Breed together, all bets are off in November.

“People are playing a bit of a waiting game,” said Ross of wealthy donors’ intentions between Breed, Farrell and Lurie.

Neighbors has already committed $400,000 to ballot measures bolstering mayoral power, meaning any mayoral victor — even Peskin, the group’s bête noire — stands to gain from the group’s spending. 

An allied group, GrowSF, has already formed PACs opposing Chan and Preston in Districts 1 and 5, but District 3, 9, and 11 are also contested races, and could see Neighbors’ thumb on the scale. If progressives lose any two of those five races, control of the board will flip.

The prospect, for the political consultant Jaye, goes beyond the city’s borders: Reversing criminal justice reform, enacting a more punitive approach to homelessness, returning to a “war on drugs” mentality and jailing drug users — the policies backed by Neighbors, Jaye said, would go a long way towards remaking the reputation of San Francisco nationally.

“They’re showing us, telling us, revealing to us what they’re trying to do … You take out San Francisco as the leading liberal city in America, you’ve decapitated your opponent,” he said. “I think this has a lot to do with San Francisco. I don’t think this only has to do with San Francisco.” 

Methodology

Amounts in this story and accompanying graphic come from local, state, and federal campaign finance filings, as well as federal tax forms like 990s and nonprofit forms filed to the California state government. Amounts should reflect disclosed totals but will not include amounts that have not yet been disclosed.

The Neighbors funnel graph includes major donors, advocacy groups, and political causes going back to 2020. Nodes are sized depending on amounts given or received. In the Neighbors bar graph, categories like “law and order” or “governance” were chosen and tagged to spending by Mission Local.

If you see any errors or missing information, please let us know at joe.rivanobarros@missionlocal.com