I’m Trying to Track How the $10.5 Million that Franchise Tax Board Gave to NGOs for “Educational Purposes” is Being Spent

This was originally posted on January 4, 2025 and has been updated a few times. The most recent update was on March 27, 2025, where I uploaded all of the documents that I have yet to review. I’m hoping someone will beat me to it! On March 12, 2025 I also updated this post with more info on Golden State Opportunity Foundation.

Background

In 2022, as part of the SENATE BILL 154 – BUDGET ACT OF 2022, the legislature ordered FTB to spend $20,000,000 of FTB’s budget “for outreach to create increased awareness of, and participation in, the Earned Income Tax Credit and the Volunteer Income Tax Assistance Program. These funds shall be allocated via contracts to nonprofit and community-based organizations. The participating nonprofit and community-based organizations shall particularly focus their outreach effortson persons who file tax returns using Individual Taxpayer Identification Numbers (ITIN) (page 9).”

The Earned Income Tax Credit (EITC) is a tax credit that can be taken as a cash refund if the credit is more than the person’s tax liability. People who make less than $12,000 per year are not required to file a tax return; the EITC is a carrot to essentially pay them to file a return. ITINs are California’s equivalent to social security numbers that are issued to illegal immigrants (California is a sanctuary state).

The FTB gave this $20-million to the Department of Community Services and Development (CSD) to distribute to the Non-Governmental Oganizations (NGOs). This is the contract between FTB and CSD from July 1, 2022 through June 30, 2024. This is a Cliff Notes version of the contract in which I highlighted some concerning information that needs more digging into.

At the FTB’s June 2024 Board Meeting, FTB reduced the budget to $10.5 million.

I made a California public records request (CPRA) from CSD for accounting ledgers of how the money was spent in the past and budgets showing how the funds were slated to be spent this year. CSD said they don’t have “granular level data” — they only track how much they give to which NGO, not how the NGOs spend the funds.

At FTB’s September 2024 board meeting, I made the above two-minute speech asking FTB is they had any systems of oversight in place to ensure the NGO’s were utilizing the money appropriately. FTB was supposed to respond within a month. On January 6, 2025, I sent a follow up email asking them to respond. On January 15, FTB stated that they had no documents responsive to my requests. This confirms that FTB is not overseeing how the funds are spent.

Even though I didn’t get the budgets that I’d originally requested, CSD has sent me a lot of records. It is going to take me a while to go through them all, so I will update this post with more information as I go through the documents.

Documents:

CalEITC Allocations 2016 – 2024 – I have not gone through these yet

2021 CalEITC Notice of Funding Availability – Education and Outreach Grant — I have not gone through these yet

Batch 1 EO October – December 2018 Combined – I have not gone through these yet

Christine Grab Batch 2 — I have not gone through these yet

Grab PRA Batch 3: Monthly invoices from the NGOs for fiscal year 2018/2019. Even though this “Cal-EITC education program” wasn’t codified until 2022, it appears that it’s been going on since at least 2018. In the contract between FTB and CSD, it said that the NGOs would each submit monthly invoices to CSD. CSD would approve the invoices and then forward them on to the State Controller to issue the payments. The line items listed in the invoices are generic, such as “web,” “social media” and “other.” I have not yet gone through the invoices to calculate how much money each NGO received and how much the State paid out in total.

Grab PRA Batch 4: As part of the “education” program, FTB is also paying organizations to do tax returns for low income people. This batch of documents is the invoices for the tax preparers for Nov & Dec 2018. Most people file their taxes in the spring. The small invoices look legit to me since some people do file late. The large invoices are suspicious — there aren’t many people filing at the end of the year, and the majority of the money went to “sub-contractors” and “other.”

Grab PRA Batch 5 — I have not gone through these yet

Grab PRA Batch 7 — I have not gone through these yet

Suspicious Activity:

The Golden State Opportunity Foundation far and away billed the most in Batch 4, claiming $139,438 paid out to “sub-contractors” and “other” for the purpose of 2018 CALEITC FREE TAX PREP ASSISTANCE EXPENDITURE/ACTIVITY for November and December 2018. I believe further investigation needs to be done regarding which subcontractors they used and an itemization of what made up the “other” number.

I did do a little bit of poking around on The Golden State Opportunity Foundation. It appears that they have two purposes: they sign people up for government programs that aid the poor and they are lobbyists to try to get more money and more programs to aid the poor. Per their 2023 tax returns, they brought in $5,676,872 in government grants and paid $3,069,975 in total salaries and benefits. Of that $3 million, they paid their officers $1,311,058.

Per their 2023 tax returns, they paid Fraser Communications $676,330 for Online Comm & Research, paid Crossroads Consulting Inc. $110,126 for Consulting & Prof Dev., paid $1,402,680 for “Grants and other assistance to domestic organizations and domestic governments for the CALEITC4ME CAMPAIGN,” paid $250,571 for “Lobbying: Direct contact with legislators, their staffs, government officials, or a legislative body,” and pad $371,414 to “other.” Of note is that it appears that they didn’t pay any money to organizations who do tax returns; all the organizations listed appear to be social welfare organizations that help underserved populations, such as immigrants, women, and the youth. so who are the subcontractors collecting the Tax Prep Assistance money? Also of note is that the information regarding their contributors is “restricted.”

My Concluding Thoughts…

1. Given that FTB’s schemes to overcharge taxpayers disproportionately affect people of low socio-economic status (the people not equipped to be able to fight back), I believe that this Cal-EITC “education” program is a ploy by FTB to find more victims to exploit.

2. As I go through the paperwork, I’ve realized this is also a ploy to make the California economy look stronger than it is. FTB and CSD were each allotted funds to hire people to administer this program. Each of the NGOs hires people to administer and fulfill their piece of the program. Since the funds come from the government, the NGO jobs should be considered governmental jobs, but they are falsely counted as public sector jobs. At this point, I believe the State is using programs like this one to hide that California’s economy is weak and fragile.

3. At FTB’s quarterly board meeting on December 10, 2024, the first two hours were devoted to “fighting poverty.” Several NGO’s gave short presentations on the strategies they each believed would best eliminate poverty. Most of these strategies were socialistic in nature, cementing FTB as the administrator and their respective NGO as a middle men. None suggested strategies that were self-empowering so that people could break out of the cycle of government aid. The reality is that when “fighting poverty” is your business, you need to ensure poverty exists so that you don’t eliminate your own job. And if you want your business to grow, you need to push for strategies that will ensure increased poverty so that more people need your help.

Note: I am not suicidal, I don’t have depression issues, I am a careful driver, I rarely drink alcohol, and I do not use drugs of any kind (not even aspirin). My family lives a wholesome life. If something happens to me or my family that is out of character for us, we were set up by the State of California as revenge for exposing their crimes.