How Homeless Organizations Spend Their Money

Since 2016, the number of individuals classified as homeless across the United States has steadily increased according to data from the Housing and Urban Development (HUD). Prior to that, homelessness had been in steady decline for years.

Tent cities began appearing in major cities across the country, many in western states like New Mexico, California, Oregon, and Texas. In places like San Francisco, the growth in the homeless population would come alongside a stark increase in property crime like car break-ins.

California would see a 124 percent increase in emergency housing needs since 2007 to 2021 based on a report from the nonprofit org End Homelessness. While this has been ascribed to housing costs, populations at risk of homelessness because of financial conditions have been in decline.

Washington, DC mayor Muriel Bowser has trumpeted that city’s approach to dealing with the growing homeless population, which was down 47 percent since 2016 after a new program, Homeward DC, was implemented. The program has largely focused on rental assistance.

But that number doesn’t give a complete picture as the number of unsheltered homeless individuals in the city—those not in a homeless shelter like those living in tents—is currently almost double what it was in 2007.

While the total homeless population in D.C. has declined since 2016, that year was also a high water mark for homelessness, and the city still has over 1,000 more homeless than 13 years prior.

D.C. is well known for its high homeless population—it has the largest homeless population per capita than any other state by far. Much of it due it being a city with no rural areas where homelessness is infrequent, but also because it offers a lot of services and housing to the homeless from other areas.

But with the growing homeless population across the country, scrutiny has come to the homeless advocacy groups that provide much of these services. A recent HUD report showed that D.C. had the highest vacancy rate for low income housing in the country.

So what do the homeless nonprofits do with their funding?

Based on 2019 Internal Revenue Service (IRS) filings, the nonprofits that provide these services largely spend their money on salaries.

Spending on support for the homeless outside of staff—food, housing, clothing, etc.—is often less than 15 percent unless the organization owns a shelter itself. Some organizations don’t appear to list anything that could be considered an expenditure on homeless support outside of employing homeless support staff.

Some of that is reasonable. Many of the organizations provide housing and job assistance programs. Essentially, helping homeless residents find employment or apply for D.C. assisted housing. But with an estimated 6,500 homeless individuals in Washington, D.C. and 77 homeless dying in 2022 alone, it leaves open questions as to how effective these programs are. And if the Mayor’s Homeward DC program has been effective since 2016, why weren’t homeless advocacy groups effective before then.

For example, the nonprofit Coalition for the Homeless spent $6,492,488 in 2019. Of that, 79 percent was on employee compensation. About $181,270, 2.8 percent, was spent on housing and food supplies.

So Others Might Eat (SOME) may be the largest homeless support group in Washington, D.C., spending $32.7 million in 2019. Of that, $2.4 million—7.3 percent—is spent on meals, food, supplies, and client assistance. For employee compensation, the total was $22,151,708—73.8 percent.

But SOME does run shelters that it owns, like Isiah House. They are part owners in a number of LLCs that provide affordable housing. They also have over $33 million out in loans and they also run their own independent healthcare service.

In its statement of program accomplishments, the organization lists numbers for clothing (38,152), meals (367,855), and showers (12,211) provided, as well as affordable housing (236 families with 482 children, as well as 690 single adults), mental treatment (190), and doctor visits (26,254).

Other organizations—including Miriam’s Kitchen, Friendship Place, Everyone Home, National Alliance to End Homelessness—all have varying ratios of salaries and support over total expenditures. Only one, Thrive, had a compensation ratio below 50 percent.

In total, they spent $62.3 million in 2019.