January 30, 2009, Seattle, WA – As snowstorms blew into this Northwest city and the economy iced over in December, the occupants of a shelter nestled among industrial buildings on the north side prayed for divine intervention.
“We were hoping for the Christmas miracle,” says Glen Dennis, 41, who was working his way through a residential drug-treatment program at the CityTeam Ministries shelter. Dennis and the other 11 guys in the long-term program -dubbed the “disciples” – also worked each day to prepare for some 50 to 60 overnight shelter guests, and dish up free hot meals to about 100 people. “We kept doing what we were doing, and hoped someone would come by and drop off a big check.”
But the check did not come – even after a coalition of other shelters, nonprofits and local churches tried to pull together a rescue package to keep the shelter open. On Dec. 27, CityTeam Ministries, based in San Jose, Calif., closed the Seattle facility – leaving scores of people to seek food, shelter and sobriety elsewhere. For Dennis, who had been free of crack cocaine for nearly 11 months, the upheaval led to another painful relapse out on the streets.
“It’s a real loss,” says Herb Pfifner, executive director of the Union Gospel Mission shelter in downtown Seattle. “We’re all scrambling to try to handle the growth of homelessness because of the economic situation – and then the closing of another mission adds more pressure.”
The CityTeam closure is a piece in the expanding problem of homelessness across the nation: Shelters and related services for the homeless are facing funding shortfalls as the downturn takes its toll on state budgets and corporate donations. And while individual donors in many cases are keeping up gifts – or even digging a little deeper for charities that help with urgent needs like food and shelter – the service providers say they are faced with a rapidly growing demand from people losing jobs and homes in the economic crisis.
Less funding, more demand
“A downturn in (overall) funding in this case is accompanied by a surge in demand, so a homeless shelter, food pantry, or job-training program is going to feel it first,” says Chuck Bean, executive director of Nonprofit Roundtable of Greater Washington, in the District of Columbia. “Even if they have 100 percent of their budget compared to last year, they now see a 50 percent surge in demand. Then (they) get into the tough decisions: Do you thin the soup, or shorten the line?”
Even as census-takers fan out in cities across the country this week in an attempt to count homeless populations, advocates and experts point to a bevy of evidence that homelessness is rising and will continue to, most notably among families with children.
Shelters across the country report that more people are seeking emergency shelter and more are being turned away. In a report published in December, 330 school districts identified the same number or more homeless students in the first few months of the school year than they identified in the entire previous year. Meantime, demand is sharply up at soup kitchens, an indication of deepening hardship and potential homelessness.
“Everything we are seeing is indicating an increase,” says Laurel Weir, policy director at the National Law Center on Homelessness and Poverty. “And homelessness tends to lag the economy. So we’re probably seeing the tip of the iceberg here.”
In the foreclosure crisis, the people being displaced from homes won’t likely be on the street immediately, explains Michael Stoops, director of National Coalition for the Homeless.
“The people who have lost homes or tenants in homes that were foreclosed … have downsized, and if that doesn’t work they will move in with family and friends,” says Stoops. “After a while, they will move into their RV in a state campground. The next step is a car. And the worst nightmare for a working, middle-class person or even a wealthy person who has never experienced homelessness is knocking on a shelter door.”
Services teeter on brink
As the case of Seattle’s CityTeam shelter illustrates, many nonprofits serving the poor are working on a shoestring, even in better times. Seattle-area donations to the shelter had to be supplemented from general funds, said Jeff Cherniss, chief financial officer of CityTeam, which operates shelters and food programs in five other U.S. cities.
“We were hoping (the Seattle shelter) could become self-sustaining,” says Cherniss. CityTeam Ministries, a Christian organization funded by donations from individuals, corporations and churches, kept the Seattle facility afloat with help from its general fund for most of a decade, but the 2008 crisis prompted them to retrench.
Every major source of funding is under pressure in the current environment: Charitable foundations – which rely on corporate profits for their seed money and investments to preserve and build those funds – have been forced to pull back grants after taking a massive hit as corporate earnings faltered and stocks plunged. The National Council of Foundations recently estimated that philanthropic foundation endowments have lost $200 billion in value during the economic crisis.
A few of the largest foundations have, despite losses, promised to maintain or give at higher levels in the face of the crisis. The Bill and Melinda Gates Foundation this week said it would increase its giving to 7 percent of its assets from 5 percent. And the John D. and Catherine T. MacArthur Foundation announced three gifts totaling $34 million to help homeowners in Chicago avoid foreclosure and keep renters in homes.
Still, the casualties are mounting. Among them: Atlanta nonprofit Nicholas House, which closed a shelter for families in mid-January so it could safely keep other housing services open. Nearly all corporate donors gave to the organization at lower levels this year, says Dennis Bowman, executive director of the 26-year-old agency. The final straw came when a corporate donation ended, and was not renewed.
“It was directly because of the economy – the business has suffered in this economy, and so can’t provide the funding, which was well over $100,000 a year,” says Bowman.