California Budget Issues 2024-25

 California's January Governor’s Proposed Budget has already been released and after watching the video on it, we at BBFK have a few ideas for the May Revision budget. Although Governor Newsom has many bold plans for the future of California, we want to address some of the inconsistencies and failures of said budget. Whether it is the rampant issue of homelessness to the affordability of higher level institutions, California legislators must change to how the budget is spent in this state.

• It is time for California to readdress the issue of homelessness and the ineffective heavy financial allocations aimed at solving it.

• Despite the state of California and Governor Newsom dedicating billions to eradicate homelessness and still advocating increased spending on the issue of homelessness , the situation seems to worsen with more funding despite the state government's admission of no progress.

• We propose slashing the budget for the homelessness crisis by half, from $15 billion to $7.5 billion, to still maintain a standard fund to tackle the issue but not ramp it up anymore as it is ineffective 

• Here are a few articles that also show the extent of the problem in California when dealing with the homeless:

  • California's $20 Billion Effort to Combat Homelessness Fails to Curb Rising Unhoused Population

  • Audit Finds SF Homeless Housing Provider Misspent Taxpayer Money

  • After reports of botched homeless count, city ordered a redo—and then backtracked

  • In Hollywood, homeless encampments fuel neighborhood frustration with Bass and Raman

  • A year ago, L.A. County declared homelessness a state of emergency. Is it working?

  • L.A. hotel’s homeless residents forced school to shut down, lawsuit says

  • Blue state's $143 million homeless program got less than a thousand people housed. Now governor wants more

• Although California's investment in mental health reform is commendable, it is important to  address the root causes of mental health issues. One of the primary roots for mental health issues is social media that we see time from time again hurts our youth. Per Mayo Clinic, the risks social media poses to teenagers is emphasized through illegal acts, self-harm, and eating disorders.

  • If we have age limits on addictive products such as alcohol, gambling, smoking, etc. then maybe it’s time to put an age limit on social media as it is also addictive

• If California is serious about dealing with this issue, they can look at the model of Florida’s social media ban for teenagers (should be 18 years old) and the social media companies should help pay for all the damage that they have caused to our use youth.

• Remove TK-16 and stick with K-12 because we have to recognize that our youth have to make their own decisions instead of ramping up the use of tax-payer dollars. Also, if community college isn’t working for our youth, it’s time to make a change.

• It should be mandatory that there is a detailed breakdown and oversight for all District spending, since schools pick there own auditors and the LAO or anyone else in government doesn’t double check where the money is going (over $100B of taxpayers money)

• One of the big issues with the budget of California is the excessive funding College Corps receives which $293M from the state 

  • The question that has to be asked is whether it is better to help 2,300 university students that have already been accepted to a higher level institution or 300k high school students (just to do the simple math, we are helping 130x the amount of students we would be helping)

• Instead of focusing $1.9B on “Career savings accounts” or Cal Kids, which has low utilization rates at 16%, you can be redirecting it to BBFK to expand the education of our youth. Giving our youth the right information at the time!!

• UC and CSU will not answer our calls/emails to give us a breakdown of where the billions they receive go towards nor can anyone in the government such as the people within the Budgeting Committee. This another issue with our colleges having far too much power. Both public and private in California, we ask you whether they need government grants when their foundations have so much in assets:

• Stanford: $60B (received $1.37B in government grants in 2021-22)

• USC: $13B (received $500M in government grants in 2021-22)

• UCLA: $5B (Unknown as UC refused to answer calls to breakdown all UC’s government grants despite receiving $4.9B in California Budget)

• UCSF: $3.47B  (Unknown)

• UC Berkeley: $3.4B  (Unknown)

• Santa Clara: $2.9B ($2M in government grants in 2021-22)

• Pepperdine: $2.4B ($14M in government grants in 2021-22)

• UCSD: $1.6B (Unknown)

• UC Irvine: $870M (Unknown)

• UC Davis: $758M (Unknown)

All in all, California is a state that has an excellent present and a potential for an even better future, but when it comes to the issues of the budget, it cannot be overlooked anymore. Whether it is excessive funding to programs that are inefficient, political conflicts of interest, and the incomprehension of oversight and accountability, California lawmakers must do better. One of many ways to address this issue is to dedicate 1% in any program that is passed, on the sector of accountability and oversight. While the progress is going to have to start small for California, it is better to start it rather than avoid the issues entirely. By California joining the principles shared with BBFK we can aspire for a better future for our youth.

• A new bill that guarantees $500M to BBFK: MORE Program in the Fall 2025 and beyond to educate all high school students moving forward (15,500 classrooms equating to over 423,000 students PER year).

  • There is plenty of money circling through K-12 for BBFK to receive $500M to help our youth on a course that is worth "$100k of a lifetime benefit." per CNBC

  • We can amend Prop 98 or write a new bill (similar to Prop 28)

  • Instead of money being spent on programs that are uncertain or ineffective, that can be redirected to BBFK to foster the change we need in California

• 1% Accountability/oversight on all money being spent within local, state, and federal budgets.

• Removing lobbyist from government

• A threshold bill to stop government funding if your nonprofit organization has X amount ($500M, $1B, $2B) in net assets or fund balances.

To Give or To Tax: Advocating for Strategic Philanthropy from Multimillionaires & Billionaires

Many times we hear that the American Dream is dead, in our opinion, this is untrue. With the success of many self-made millionaires or billionaires, the dream to be whoever and whatever you want is truly alive in the United States. Although it could be argued that it is harder to build your wealth as the history of our country unravels, our question is: When was it ever easy to get rich? We believe that everyone who is self-made deserves praise, as it takes hard work, perseverance, and, in addition, the society that enabled them to reach those heights. However, it is pervasive that there is a problem with the system of inheritance and passive income for a billionaire’s astronomical amount of money that needs to be addressed. We believe that taxing itself is not the actual issue but instead what the money is being used for. Multimillionaires and billionaires should cut out the middlemen (government, United Way, etc.) to give directly to groups that are making the biggest impact rather than looking to be taxed to influence our society. Over the generations, especially in the last few decades, we have seen how the government can waste billions, if not trillions, of taxpayer dollars on unproven projects, bureaucracy, PPP loans, and the overall mismanagement of allocating funds throughout the country. This is why we strongly believe in not taxing the rich more but opening up the conversation to give more strategically per year.

With that all being said,  Steve Ballmer, we pick you to be our guiding example of how the 1% can give more in 2024 and beyond. The reason why we chose you is because of the recent CNN article discussing the $1B you will receive from your dividend from your Microsoft stock ownership while only being taxed 20%. What we are proposing is giving $500M to Building Blocks for Kids (BBFK) so that we can educate California high school students about financial literacy and career discovery. With the $500M, BBFK would educate one entire grade level in California high schools for a full year ( around 15k classrooms and 423k students) and demonstrate how there is a way to escape the cycle of poverty and maximize their future. Therefore, every multimillionaire and billionaire should give to the groups who prioritize accountability, budgeting, and oversight which will bolster the next generation of what it means to be financially free and find a career that will have the biggest impact on them and the country. 

“No one gets to choose their childhood but everyone should be able to make their own future” - BBFK

Reevaluating Government Grants: University of Southern California’s $500M Dilemma

Reevaluating Government Grants: University of Southern California’s $500M Dilemma

• With $9  Billion in assets and a $7.1 Billion endowment, USC's need for a massive $500 Million grant raises concerns about the necessity of such large grants. If there is a federal/state guideline in place for poverty then there should be guidelines to cap or restrict government grants to large nonprofits.

• USC should give back the $500M and any government grants received in 2023,  so BBFK can put the money to use today to fund our program throughout all of California (one-grade level of high school for the entire year) and educate our high school youth on financial literacy and career discovery rather than the money sitting in a USC bank account. 

• What is better for our country:  Helping out 50,000 college students or 423,000 high school students?

      In examining the distribution of government grants, particularly in the case of the University of Southern California (USC), we question the necessity of a massive $500 million grant amidst its substantial financial resources. First and foremost this institution does not need an introduction to why it is considered to be one of the greatest schools in the country’s history. USC’s legacy lives with all its great alumni, professors, and programs (such as business, engineering, technology, athletics, etc). However, like any great school, USC has its share of controversy. Data shows that their program received large government grants throughout the year  2022. While we believe that there is nothing wrong with large groups receiving government grants as a steward for their community, we need to make sure that those who do not need the extra funding do not receive it such as USC.

      The most important question that we continue to ask is why isn’t there a cap on billion-dollar nonprofits to ask and/or be allowed to receive government grants in the first place. If there is a federal/state guideline in place for poverty then there should be guidelines to cap, restrict, and make sure there are no conflicts of interest with nonprofits receiving grants/donations in the first place. For example, a “nonprofit” like USC which has the political power, influence, and bankroll of $9 Billion in total assets should not be receiving $500M in government (federal/state/local) grants. In addition, if a nonprofit has already exceeded a certain threshold (is the limit $500M, $1B, or $2B?) then naturally they shouldn't be allowed to keep the money in their banks, which would allow another organization to use it today. We understand the argument that out of the $9B USC has in assets, $7.1B of it is in endowment funds. Nevertheless, the board still has $4 billion at their disposal, $2B sitting around at their discretion, and another $2B from the endowment fund (quasi control). Therefore, based on our research, USC does not need the $500M to sit in a Carribean bank account (that already has $1.4B, what is it doing there in the first place?) and it would be better put to use for our youth today by giving the money to the BBFK: MORE Program California, benefitting 423,000 high school students in the state on financial literacy and career discovery. 

      There needs to be a better approach that focuses on true impact, accountability, oversight, and proper budgeting for all government grants that are distributed to any organization (small or large). People in power such as President Biden, Gavin Newsom (all of our governors), and all other politicians that control government spending need to create reform on how government grants are distributed to small and large non-profits. Ultimately, is it more important to spend  $500M on 50,000 college students or 423,000 high school students across all of California…You know our vote.

Greed or Philanthropy?: Children's Hospital of Los Angeles

• Change the way governments give to nonprofits (reforming grant writing processes by capping and restricting additional funding for nonprofits with assets exceeding $100 million)

• Governor Gavin Newsom, state senators, and assembly members end the inequality of nonprofits to close the gap from billion-dollar nonprofits to small nonprofits (parallels to the inequality gap in the United States)

• Children’s Hospital of Los Angeles (CHLA) should return the $149 million in government grants received in 2022 and any government grants received in 2023 

• BBFK should receive funding to audit Prop 64 accountability, spending, selection process, etc.

At Building Blocks for Kids (BBFK), we hold a strong belief in the potential of the United States as a leading nation globally. This belief is grounded in the nation's unique capacity for continuous improvement, rooted in the very principles of our Constitution. As we strive to create a more perfect union, we recognize the need for reform in various areas, including the nonprofit sector, climate change, education (K-12/Higher education), government (Accountability/Lobbyist/Oversight/Spending), healthcare, housing, homeless, immigration, prison systems, and many more in alignment with the values and aspirations that define our nation. We have ideas for all these topics and would love to discuss them, but for this article, we want to focus on non-profit sector reform. The whole system of nonprofits should not be based on who knows more people, who has the biggest grant-writing team, who throws the best parties, or who has the most influence to pay for celebrity endorsements, but about who is creating the most significant impact to address the issues in our society. There are many billion-dollar organizations that should not swim in large sums of money without using them to make a difference (aka Scrooge McDucking it) while small organizations struggle to find any grants or donations. Many times these large groups continue to ask (instead of asking, just to keep the same tense) for more money, which portrays greed rather than their “philanthropy.” Our research shows that it is time to replace old non-profit granting methods with a new approach focused on true impact, accountability, and proper budgeting. 

We question whether it is greed or philanthropy when a non-profit is asking for more money from the government (and receiving it) even when they already have $2 BILLION in assets, as seen in the case of Children’s Hospital of Los Angeles (CHLA). BBFK (a $50k nonprofit organization) was competing against CHLA for the Elevate the Youth (Prop 64) Cohort Number 4. CHLA is not the only nonprofit organization that we took issue with for the selection process of all Prop 64 grants from the Sierra Health Foundation which makes the recommendations to the DHCS. We reached out to CHLA, Sierra Health Foundation, and DHCS, and none of them responded to our requests for comments. The only reason CHLA got the donation was because of their power and influence, which makes it seem that government grants are a rigged game. It is also apparent that the whole system of grant-writing (to receive the donation in the first place) is an unequal setup for the smaller nonprofits. Sierra Health claimed that BBFK did not write a well-written medical grant; keep in mind our youth-led team, writing these grants, are high school and college interns, whereas a fellow “competitor” like CHLA are more than likely paying their team of grant- writers millions of dollars. This is counterproductive when taking into consideration their vast bank account which makes you question, why are they even allowed to go after this grant in the first place!?!? Despite their assets of $1.7 billion, and of that, $850 million is in publicly traded securities. Although we have no doubt that CHLA is a foundation that genuinely wants to make a difference, it is still prevalent that they should not be asking for money when taking into consideration their diverse financial portfolio. Did they really need that $1 million?

In conclusion, CHLA should give back the $149 million received in 2022 (per their 990 Form)  and any money received in 2023 from government grants. This money will be put to good use with LAUSD and the MORE program, ensuring that in 2024 every single student in one grade level at all high schools will receive this program. Furthermore, Governor Gavin Newsom, our state senate, and our assembly members should change the law on who is allowed to receive government grants by putting caps on nonprofits over $100 million, $250 million, or $500 million in assets. This ensures that when a group reaches a certain size (whether it is million or billions) they should not be allowed to receive additional government funding. Thus, by establishing a threshold for grant eligibility, we can ensure a just allocation of taxpayer dollars and eliminate the outright greed we are finding in these large organizations. By creating a new grant system that prioritizes accountability and societal impact rather than a barrage of false promises, this will enhance transparency and allocation efficiency. With these changes, we can make a more substantial and positive impact on our community, utilizing taxpayer dollars more effectively.