☆ Nonprofit researcher: Homeless orgs fail from skewed spending, self-perpetuated bureaucracy, demonizing actual treatment
Image by Elvert Barnes
Freddie deBoer, longtime “old-school” Marxist/leftist, has extensively researched what he dubs the “Nonprofit Industrial Complex” for his book How Elites Ate the Social Justice Movement. In this Opp Now exclusive, deBoer explains the prevailing phenomenon of underperforming homelessness nonprofits—and where the social justice-focused left is taking good intentions to grisly conclusions.
Opportunity Now: Many people in San Jose, including our mayor, are wondering what's going on with nonprofits dedicated to eradicating homelessness. Recent data finds that they're connecting with a lot of folks—but they aren't transitioning many off the streets and into safe housing options.
Freddie deBoer: A big factor here is the structural nature of how nonprofits can continue to survive. Over time, more of the organization's energy and resources must go to fundraising so they can stay afloat. It's just the nature of these institutions: As they become more successful and well-funded, they metastasize and take on more and more, which in turn means their recurring costs go up and they must focus more on fundraising. In my book, I quote someone who compares big nonprofits to “fancy dinner factories,” as they have to hold them frequently to request additional donations.
So the common (and generally reasonable) critique is that many nonprofits aren't putting enough of their funding into actual programming. You can check the numbers for most nonprofits on sites like Charity Navigator.
ON: Several key homeless orgs that SJ contracts with—People Assisting the Homeless, Homefirst Services of Santa Clara County, and Destination: Home— have very typical administrative/funding to program expenses ratios. This sounds like a positive thing to us, then, right?
FD: Here's the other important thing when analyzing those statistics. My sense, from my own experience and extensive research, is that it's permanently difficult to determine what should be categorized as administrative versus programming expenses—for us on the outside looking in, and even the institutions themselves. Definitionally, it's tricky. For instance, if you have a permanent staff who's implementing programming, to what extent should their salaries be represented as program expenses? And different organizations have different rules for answering that question. So the ratio of administrative to funding to programming costs doesn't necessarily have a consistent meaning across institutions. And this isn't just a matter of organizations misrepresenting resources spent; it's challenging, practically speaking, to assess what expenses go under what umbrella.
ON: So programming expenses may or may not be helpful metrics for analyzing these organizations. What else have you found in your research about nonprofits sticking around—and acquiring valuable funding—despite failures to address core goals?
FD: When conducting research, I discovered two medical nonprofits that had been founded as part of the effort to eradicate smallpox. They're still operating today, still taking tax-deductible donations. There hasn't been a case of smallpox for 50 years, so you'd be tempted to say, “Mission accomplished.” Yet instead of closing up shop, they'd rebranded as a generalist health organization. Institutions have the natural desire to perpetuate themselves; so they will direct most of their energy there, and find a way to keep going—even if they aren't performing on key metrics.
This goes down to the individual level, too. Human beings don't just eliminate their own jobs. It's what's called the “iron law of institutions”: People within an institution will always do what's best for them within the institution, rather than for the institution itself. Otherwise, they'd have to make the adult decision of saying, “I'm going to remove my own organization's reason for being.” There's the classic example of a guy who's the VP of his division in a corporation. He becomes aware that his division is redundant and costly, but in bringing up that fact, he'd lose his own position. So he doesn't make the move that would help the company—because it would hurt his own standing.
In nonprofit land, this looks like an endlessly mushrooming bureaucracy. Generally, no one within an organization will take a stand against it because it might threaten their own position, even if indirectly. For instance, managers don't want to eliminate positions beneath them because it degrades their own standing. What you can do is align the interests of individuals within the organization with those of the organization's intent, as best as you can.
ON: But wouldn't abating homelessness be, both institutionally and personally for employees, in the best interest of these nonprofits?
FD: Homelessness is a good example of an issue that can't be entirely eliminated, but if a nonprofit's particularly effective at their job, it would result in making that institution (and individuals' own jobs) redundant. So that's one thing to consider.
And here's another crucial factor: Homelessness is also caught in a culture war about the social justice-inflected sense that we can't be judgmental about people's choices and we should reduce stigma. This often leads to the perverse consequence of homelessness organizations fighting for people's rights to live in tent cities, which likely goes counter to their institutional goal of improving the homelessness situation. Here's a legitimate question: Should we be allowing and encouraging the squalid living conditions of street encampments? Really, shouldn't the nonprofits be advocating for healthy, safe options?
This is a huge question, which comes with a real set of consequences, among left-leaning people: how to deal with the long-term homelessness problem. Giving people houses helps but doesn't solve the problem. Unfortunately, nonprofits don't often do well with problems like homelessness because you can't just throw money at it (as is their standard paradigm); some people are treatment-resistant and reject others' efforts to provide help.
Ultimately, the homelessness sector is filled with people who have good intentions. But many advocate for a kind of stasis (in the interest of not coercing individuals to change their lifestyle), and end up endorsing the status quo of people living on the streets. For instance, my friend in Minneapolis is a state social worker who works with mentally ill people. She tries to persuade homeless people to leave the streets and enter treatment, move into transitional housing, etc., which is already a hard pull. But she has been intercepted by activists, who claim she has no right to put people away, comparing her to a bad-intentioned cop.
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