A Bi-Coastal Crisis of Credibility Amongst Homelessness Nonprofits
San Fran city workers and police remove unhoused person’s tent from a homeless encampment. From the San Francisco Standard
Last summer, the Supremes decided that it is not cruel and unusual to criminally punish homeless people for sleeping outside. Some observers labeled the decision part of our collective “moral failure.” But supporters and detractors are not distinguishable like Red is from Blue. It’s likely that red place inhabitants have fewer qualms about criminalizing homelessness, but even inhabitants of blue places . . . are . . . well . . . sick and damn tired of homeless people. Sizing you up, begging for change and doing their business right there on the street. After the Supreme Court’s ruling, San Francisco, for example, increased “aggressive sweeps” whereby homeless people are pushed away, sometimes rudely and with water hoses that are supposed to be used only to scrub the sidewalks of urine, defecation, cigarette butts, and needles. The cherished junk homeless people can’t quickly gather and carry with them usually gets soaked and thrown away. People are just tired of it:
The Supreme Court’s momentous June ruling in the Grants Pass v. Johnson case removed a key protection for unhoused people, allowing criminalization even when there is no available shelter. While some Democrats condemned the decision, several leaders on the West Coast, where unsheltered homeless encampments are more pronounced, quickly moved to embrace it. California Gov. Gavin Newsom has issued an order for “hazardous” encampments to be dismantled, and San Francisco Mayor London Breed has declared that she will launch “aggressive” homeless sweeps that could include criminal penalties. Other local governments across the U.S. have also introduced or passed camping bans that seem to have been motivated by the court’s decision. In Minnesota, several towns have introduced camping bans that can now be enacted without significant legal challenge. Portland, Oregon, began a long-planned sweeping citywide camping ban on July 22. And Des Moines, Iowa, passed a camping ban that includes a $50 fine. Some cities and states had already passed anti-camping measures before the Supreme Court made its decision. For instance, Escondido, California, passed a new ban shortly before the ruling. And in Kentucky, lawmakers took it a step further by authorizing the use of deadly force on people camping on private property.
As the Court noted, homelessness is persistent and intractable. But while we are wringing our hands from comfortable places, according to the Court, nonprofit housing organizations are in the streets, underpasses, parks and alley ways trying to fix it:
Communities of all sizes are grappling with how best to address challenges like these. As they have throughout the Nation’s history, charitable organizations “serve as the backbone of the emergency shelter system in this country,” accounting for roughly 40 percent of the country’s shelter beds for single adults on a given night. Many private organizations, city officials, and States have worked, as well, to increase the availability of affordable housing in order to provide more permanent shelter for those in need. But many, too, have come to the conclusion that, as they put it, “[j]ust building more shelter beds and public housing options is almost certainly not the answer by itself.”
Given their central and indispensable role, it is important that housing nonprofits maintain credibility. Local, state, and federal governments are in public-private partnerships with nonprofits all across the country. Housing nonprofits are often receive and spend big chunks of funding by governments unable to tackle the problem alone, or just better advised allowing charities to do the work. And many unhoused people have to be convinced to accept help and not live in the streets. Credible nonprofits not associated with the police or government are usually better at that. They have credibility governments can’t have with people they sometimes help, sometimes push away, and sometimes arrest. Credibility is important.
So stakeholders are worried that there seems the start or continuation of nonprofit housing corruption scandals across the country. In San Francisco, there has been a bunch of scandals involving housing and poverty relief organizations. Mostly involving private inurement type stuff where nonprofit fiduciaries allegedly line their own pockets at the expense of unhoused people. So much so, that the city and nonprofit sector launched a PR campaign to clean up Civil Society’s reputation. In New York City, the Department of Investigation released a report last week describing a pattern of fraud and corruption – again, mostly of the private inurement type — amongst City contracted housing nonprofits. The NY Times reports that nonprofit housing organizations implement New York City’s $4 billion network of homeless shelters. On both coasts, anecdotal evidence depicts housing nonprofit organizations as unaccountable and incompetent family run businesses bent on nepotism and skimming. From the NYC report:
City-funded nonprofit service providers pose unique compliance and governance risks, and comprehensive City oversight is the best way to stop corruption, fraud, and waste before it starts. This deep dive into the City-funded homeless service provider system builds on DOI’s extensive experience investigating nonprofit fraud, and our 2021 Report concerning City-funded nonprofits. Today’s Report provides ample evidence of the risks specific to nonprofits and shortcomings in City oversight and makes 32 recommendations to strengthen controls around this essential network
. . . .
This Report identifies a variety of compliance and governance risks at these providers, as well as in the City’s overall management of the shelter system. These risks vary in their severity and include:
1. Conflicts of interest affecting City money. DOI identified cases where insiders at the shelter provider had personal business interests involving the shelter through which they received payments outside their regular compensation. In some cases, shelter executives simultaneously held employment at a private entity, such as a security company, that was hired to provide services at City-funded shelters.
2. Poor Citywide controls over how City money is used for executive compensation. DOI identified multiple shelter executives who received more than $500,000 per year, and in some cases, more than $700,000 per year, from providers and related organizations. Executive compensation in these cases is funded either largely or in part through City funds. The City lacks sufficient rules concerning how much City money can be allocated to nonprofit executives’ salaries.
3. Nepotism, in violation of City contracts. DOI found shelter providers that have employed immediate family members of senior executives and board members, in apparent violation of their City contracts. For instance, one provider that is largely funded by the City employed its CEO’s children since at least 2007. This provider subsequently entered into a DOI-managed monitorship agreement.
4. Shelter providers failing to follow competitive bidding rules when procuring goods and services with public money. DOI found numerous cases where shelter providers did not comply with the City’s competitive bidding requirements or where it was unclear whether shelter providers conducted true competitive bidding processes. For example, this review identified multiple instances where shelter providers awarded multimillion-dollar building maintenance service contracts to companies affiliated with the buildings’ landlords.
Scandalous organizations in any context are usually outliers. Still, it can’t be good that as people lose sympathy for homelessness, they might also resent the nonprofits doing the most work to solve the problem.
darryll k. jones