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Estimated Revenue of the Nonprofit Homeless Shelter Industry in the United States

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How much does it really cost to provide shelter to the homeless?

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This video discusses the issue of homelessness in the United States, highlighting that around 600,000 people are homeless on any given night, with about 400,000 temporary shelter beds available. A significant portion of the homeless population, especially single adults, remains unsheltered. This video emphasizes the need for a systematic study of the homeless assistance sector's costs and revenue sources.

It describes how data was collected through matching shelter inventories with tax filings from nonprofit organizations. The study reveals that 41% of the revenue for these organizations comes from private donations, followed by government contracts and service fees. The variability in services offered by shelters is noted, with some providing mental health and case management.

This video also addresses the low average compensation of shelter employees, approximately $24,000, and emphasizes the sector's lack of regulation and training standards. It discusses the limited scalability of current shelter operations and questions the effectiveness of investing in new shelter beds versus rental assistance for the homeless.

This video concludes by stressing the need for innovative solutions to efficiently address homelessness and provide better guidance to public officials on managing the crisis amidst significant human suffering and operational costs.

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Here are five key points extracted from the video:

1. **Homelessness in the U.S.**: There are approximately 600,000 homeless individuals in the U.S. on any given night, with about 400,000 temporary shelter beds available. This is insufficient, as about half of the single adult homeless population is unsheltered, highlighting a significant gap in services.

2. **Funding and Revenue**: The funding for homeless assistance comes from various sources, including private donations (41% of revenue) and government contracts. The reliance on private donations poses a risk to the stability of these organizations, which often function as small, charitable operations without government mandates for providing shelter.

3. **Shelter Operations and Conditions**: Emergency shelters typically provide basic accommodations, such as cots in large rooms with shared facilities. The operational cost per bed averages between $12,000 and $14,000, but the quality of services and staff training varies widely, as many shelter workers lack professional human services qualifications.

4. **Labor and Compensation**: The emergency shelter sector employs about 160,000 individuals, with an average compensation of $24,000 per employee, which is considered low compared to other human services jobs. This low pay reflects the informal and underprofessionalized nature of many organizations in the sector.

5. **Housing vs. Shelter Solutions**: The video discusses the need to balance spending between emergency shelters and rental assistance programs. Investing in rental assistance might be more effective in addressing homelessness by helping individuals secure stable housing rather than relying solely on temporary shelter solutions, as seen in some models that emphasize rapid exits from shelter to housing.

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Here are some key quotes extracted from the video regarding the homelessness sector in the United States:

1. **Current Homeless Population**: "In the United States, we have about 600,000 people who are homeless on a given night."

2. **Shelter Availability**: "We have about 400,000 temporary shelter beds... which of course is not enough because we have about half of the single adult homeless population is unsheltered."

3. **Revenue Sources**: "Private donations account for 41% of the revenue by government contracts... service fees... about a quarter each, in terms of the contribution to the total revenue."

4. **Instability of Organizations**: "Private donations might ebb and flow with... the economy... that's certainly a risk that these organizations are... unstable."

5. **Nature of Shelter Organizations**: "Most of these organizations are pretty small... they're really charitable operations... shelter is not mandated by the government."

6. **Cost of Shelter Services**: "The modal cost was about $12,000 to $14,000 per bed... you're basically getting a cot in a large room, likely with maybe anywhere from 25 to 200 people in a room."

7. **Staff Compensation**: "The average compensation was about $24,000 per employee... that’s quite low, of course, even in the human services sector."

8. **Professional Training**: "Most of the workforce is not really trained to provide professional human services... the quality of the services is gonna be very variable."

9. **Government Responsibility**: "Government does not have a mandate to deliver these services to provide shelter. It's done on a voluntary basis."

10. **Housing vs. Shelter Funding**: "Should we be spending more money on housing placements... or should we be building out these shelter beds?"

11. **Proposed Solutions**: "If we did it in half the time, then we do it now, we would be able to have shelter for twice as many people."

12. **Call for More Housing Assistance**: "There's certainly a recognition we need to do more of it... the solution we know is gonna be some form of rental assistance."

These quotes highlight key issues related to homelessness, funding, the nature of shelter services, and the debate between investing in shelter versus housing assistance.

X-TIMESTAMP-MAP=LOCAL:00:00:00.000,MPEGTS:90000

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In the United States, we have about 600,000 people

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who are homeless on a given night,

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and a fairly large sector.

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Uh, the homelessness sector has grown to try

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to address this problem.

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And we have about 400,000 temporary shelter beds,

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that are serving this population, which

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of course is not enough because we have about half

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of the single adult homeless population is unsheltered,

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and about 31%

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of the total homeless population is unsheltered.

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It's an important question to know more about

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these facilities,

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and particularly how much it costs to operate

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that when we have not had any systematic study of the size

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and cost and the sources of revenue, expenditure, et cetera.

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The way we did this is that, the federal government,

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that, that funds homeless assistance, which is housing

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and urban development, they have a list for every community

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of the shelter providers in terms of the,

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the target population they serve,

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how many beds they have, their address, the name

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of the organization, et cetera.

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So we match that up

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with the Internal Revenue Services data set.

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Our tax agency, the IRS, they have, a

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required tax filing for nonprofit organizations,

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and there's a form they use called the Form nine 90,

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that is publicly available.

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And there's a particular agency called GuideStar

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that makes these data available to researchers.

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So we matched up the homeless shelter inventory

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with the Form nine 90 tax data to be able

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to extract the information from the tax forms.

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And that's where we get the different data

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elements we use for this study.

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They only provide, you know, a few different sources

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of revenue, basically like government revenue,

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contracts and, private donations.

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And what we found was that,

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the private donations account for 41% of the revenue

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of these organizations followed that

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by government contracts.

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And then these service fees, a lot

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of those service fees might also, by the way,

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be from the government,

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but they're not given in a form of a grant.

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They're service contracts.

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Uh, and they were about, you know,

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roughly a quarter each, in terms

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of the contribution to the total revenue.

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But, that's significant.

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As I said, 41% comes from private

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donations, which is pretty amazing.

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Private donations might ebb

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and flow with, you know, with the economy,

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with people's sense of being able to be generous,

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with these kinds of funds.

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Um, so that is certainly a risk

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that these organizations are, you know,

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unstable in the sense that they rely on them.

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But we have to also remember, most

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of these organizations are pretty small.

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They're, they're really charitable operations.

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Uh, they're not highly professionalized.

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Um, and, so they're almost,

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I would say we could consider them informal in some regards

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because, shelter is not mandated by the government.

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You know, you're not, people are not

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provided with a basic safety net of emergency shelter.

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It's done only

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because charitable organizations are

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stepping up and doing it.

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Um, and they could easily get away,

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walk away from the business.

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They don't have to do it.

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Um, and, thi this is all part

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of the reason why it doesn't scale.

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You know, that's why half

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of the single adult population doesn't even have access

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to a shelter bed because they live in a

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community that has so few.

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Um, and so we have this huge unsheltered problem.

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Um, you know, we have over 200,000 people living on the

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streets in the United States.

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These are mostly pretty thread bear places.

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Uh, and, they provide, you know,

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the modal cost was about 12,000, $14,000 per bed.

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And for that, you're basically getting a cot in a large

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room, likely with maybe anywhere from 25

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to 200 people in a, in a room, right?

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Um, with common showers and bathrooms.

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And there usually is some kind of cafeteria

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or a kitchen that will serve a breakfast,

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or maybe even in the evening they might serve a meal.

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Um, but again, a lot of that's based on donations also,

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and they rely on the volunteer labor of the,

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of the clients as well.

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So a lot of the people

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who were working in these facilities are also sleeping

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in these facilities.

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Um, so, you know, in terms of services, most

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of them don't offer very many.

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However, we did find

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that there's a broad range in variability,

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and there are certainly some providers in some cities

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that have lots of other services that they provide there.

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Mental health services, substance abuse treatment,

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childcare, legal services, all sorts

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of case management.

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Um, so there are, there's a wide variability.

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We found the average compensation was about $24,000

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per employee there.

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By the way, there are 160,000 employees in this sector in

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the, just in the emergency shelter, which is pretty large.

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It's about 0.4 employees per bed,

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because even though they operate mostly

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as nighttime only facilities, you,

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you get entrance at 7:00 PM

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and you have to leave by 7:00 AM these things still have

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to run for 24 hours.

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They have to have staff management.

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There's insurance costs, there's real estate costs, there's,

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you know, people who have to be there at night.

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People are there during the day.

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Um, so they're pretty, you know,

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it's relatively labor intensive.

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Um, and,

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but as I say, they're only, the average cost

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for employee compensation was $24,000 per person.

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And that's quite low, of course,

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even in the human services sector.

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However, there is a limitation to the data, which is,

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it includes full-time and part-time employees.

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We could not disaggregate the full-time employees.

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So the 24,000 is certainly a lower boundary estimate

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because it's gonna include, it's gonna be brought down

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by the part-time employees.

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Most other, work

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and human services, let's call it in human services,

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are have stricter standards regarding everything.

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Um, you know, they're regulated, they're licensed.

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Um, they require certain staff training,

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including, for example, a lot

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of the human service organizations require a master's in

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social work, for example, if you're gonna be working

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with clients and that their compensation is gonna be closer

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to 50 to $60,000 a year.

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Okay? Um, but the homeless sector is

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unregulated, unlicensed.

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Most of the workforce is, not really trained

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to provide professional human services.

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Um, and so, you know, the quality

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of the services is gonna be very variable.

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Government, does not have a mandate

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to deliver these services to provide shelter.

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It's done on a voluntary basis, as I said,

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except in a couple exceptions like

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New York City and Massachusetts.

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Um, and, so I don't foresee that

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that money is gonna be forthcoming.

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And there is of course, the trade off of should we be

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spending more money on housing placements,

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helping people pay their rent,

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or should we be building out these shelter beds?

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I mean, the national average is $27,000 per bed.

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Uh, that's a lot of money.

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That would be the equivalent of possibly two

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and a half rental assistance vouchers,

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almost three housing vouchers

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that could pay, pay someone's rent.

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And there's two ways to deal with the surplus of people,

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who are unsheltered.

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You can move people outta shelter faster.

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Like if we did it in half the time, then we do it now,

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we would be able to have shelter for twice as many people.

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Um, so it's either build out the shelter,

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but if you don't have a housing exit, then you're stuck with

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that, or build up the housing exits

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and move people through much faster.

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And that probably is the better way to go,

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to put the money into housing assistance, rental assistance,

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and serve people in half the time that they, you serve them.

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Now at various times, different leaders have, you know,

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argued that we need to do more housing assistance.

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There's certainly a recognition we need to do more of it.

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But no, there is nothing concretely planned

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or proposed that would in fact, expand rental assistance

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to meet the needs of this population, given

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that the solution we know is gonna be some form

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of rental assistance.

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Um, and there are different ways

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that that could be packaged.

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Um, we need to be focusing

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On how can we scale?

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'cause that's the issue, is how can we scale up solutions?

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Um, you know, it's,

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it's not worth just studying

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homelessness in its current state.

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We need to be thinking about what kind

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of guidance can we give public officials

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regarding the most expeditious

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and cost efficient way to get outta this problem.

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Um, because it's, there's so much who's in human misery

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and so much cost to operating these, facilities.

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And, that not really to great effect.

Understanding Homelessness: A Study of Shelter Resources and Costs in the U.S.

00:00:00 - In the United States, we have about 600,000 people who are homeless on a given night, and a fairly large sector. the homelessness sector has grown to try to address this problem. And we have about 400,000 temporary shelter beds, that are serving this population, which of course is not enough because we have about half of the single adult homeless population is unsheltered, and about 31%

00:00:33 - It's an important question to know more about these facilities, and particularly how much it costs to operate that when we have not had any systematic study of the size and cost and the sources of revenue, expenditure, et cetera. The way we did this is that, the federal government, that, that funds homeless assistance, which is housing and urban development, they have a list for every community of the shelter providers in terms of the,

00:01:03 - how many beds they have, their address, the name of the organization, et cetera. So we match that up with the Internal Revenue Services data set. Our tax agency, the IRS, they have, a required tax filing for nonprofit organizations, and there's a form they use called the Form nine 90, that is publicly available. And there's a particular agency called GuideStar that makes these data available to researchers.

Funding Dynamics of Homeless Shelters

00:01:37 - with the Form nine 90 tax data to be able to extract the information from the tax forms. And that's where we get the different data elements we use for this study. They only provide, you know, a few different sources of revenue, basically like government revenue, contracts and, private donations. And what we found was that, the private donations account for 41% of the revenue

00:02:07 - by government contracts. And then these service fees, a lot of those service fees might also, by the way, be from the government, but they're not given in a form of a grant. They're service contracts. and they were about, you know, roughly a quarter each, in terms of the contribution to the total revenue. But, that's significant. As I said, 41% comes from private donations, which is pretty amazing. Private donations might ebb and flow with, you know, with the economy,

00:02:38 - with these kinds of funds. so that is certainly a risk that these organizations are, you know, unstable in the sense that they rely on them. But we have to also remember, most of these organizations are pretty small. They're, they're really charitable operations. they're not highly professionalized. and, so they're almost, I would say we could consider them informal in some regards because, shelter is not mandated by the government.

Challenges of Emergency Shelter Systems in the U.S.

00:03:09 - provided with a basic safety net of emergency shelter. It's done only because charitable organizations are stepping up and doing it. and they could easily get away, walk away from the business. They don't have to do it. and, thi this is all part of the reason why it doesn't scale. You know, that's why half of the single adult population doesn't even have access to a shelter bed because they live in a community that has so few. and so we have this huge unsheltered problem.

00:03:41 - streets in the United States. These are mostly pretty thread bear places. and, they provide, you know, the modal cost was about 12,000, $14,000 per bed. And for that, you're basically getting a cot in a large room, likely with maybe anywhere from 25 to 200 people in a, in a room, right? with common showers and bathrooms. And there usually is some kind of cafeteria

00:04:13 - or maybe even in the evening they might serve a meal. but again, a lot of that's based on donations also, and they rely on the volunteer labor of the, of the clients as well. So a lot of the people who were working in these facilities are also sleeping in these facilities. so, you know, in terms of services, most of them don't offer very many. However, we did find that there's a broad range in variability,

Challenges and Compensation in Emergency Shelter Services

00:04:45 - that have lots of other services that they provide there. Mental health services, substance abuse treatment, childcare, legal services, all sorts of case management. so there are, there's a wide variability. We found the average compensation was about $24,000 per employee there. By the way, there are 160,000 employees in this sector in the, just in the emergency shelter, which is pretty large.

00:05:17 - because even though they operate mostly as nighttime only facilities, you, you get entrance at 7:00 PM and you have to leave by 7:00 AM these things still have to run for 24 hours. They have to have staff management. There's insurance costs, there's real estate costs, there's, you know, people who have to be there at night. People are there during the day. so they're pretty, you know, it's relatively labor intensive. and,

00:05:47 - for employee compensation was $24,000 per person. And that's quite low, of course, even in the human services sector. However, there is a limitation to the data, which is, it includes full-time and part-time employees. We could not disaggregate the full-time employees. So the 24,000 is certainly a lower boundary estimate because it's gonna include, it's gonna be brought down by the part-time employees. Most other, work

Challenges in the Homeless Services Sector

00:06:20 - are have stricter standards regarding everything. you know, they're regulated, they're licensed. they require certain staff training, including, for example, a lot of the human service organizations require a master's in social work, for example, if you're gonna be working with clients and that their compensation is gonna be closer to 50 to $60,000 a year. Okay? but the homeless sector is

00:06:49 - Most of the workforce is, not really trained to provide professional human services. and so, you know, the quality of the services is gonna be very variable. Government, does not have a mandate to deliver these services to provide shelter. It's done on a voluntary basis, as I said, except in a couple exceptions like New York City and Massachusetts. and, so I don't foresee that

00:07:19 - And there is of course, the trade off of should we be spending more money on housing placements, helping people pay their rent, or should we be building out these shelter beds? I mean, the national average is $27,000 per bed. that's a lot of money. That would be the equivalent of possibly two and a half rental assistance vouchers, almost three housing vouchers that could pay, pay someone's rent. And there's two ways to deal with the surplus of people,

Strategies for Accelerating Housing Assistance and Reducing Homelessness

00:07:54 - You can move people outta shelter faster. Like if we did it in half the time, then we do it now, we would be able to have shelter for twice as many people. so it's either build out the shelter, but if you don't have a housing exit, then you're stuck with that, or build up the housing exits and move people through much faster. And that probably is the better way to go, to put the money into housing assistance, rental assistance, and serve people in half the time that they, you serve them.

00:08:28 - argued that we need to do more housing assistance. There's certainly a recognition we need to do more of it. But no, there is nothing concretely planned or proposed that would in fact, expand rental assistance to meet the needs of this population, given that the solution we know is gonna be some form of rental assistance. and there are different ways that that could be packaged. we need to be focusing On how can we scale?

00:09:24 - you know, it's, it's not worth just studying homelessness in its current state. We need to be thinking about what kind of guidance can we give public officials regarding the most expeditious and cost efficient way to get outta this problem. because it's, there's so much who's in human misery and so much cost to operating these, facilities. And, that not really to great effect.

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