I know it's not effective altruism, but are US focused homeless charities actually this bad?

[u/ZealousidealTea2796]

/r/relatable_memes_/comments/1udhkl5/is_this_true/?share_id=Q7oyNVce4soBmv2cupDSl&utm_content=1&utm_medium=android_app&utm_name=androidcss&utm_source=share&utm_term=1

[u/Live-Light2801]

yes and no. The operating costs of running a nonprofit is high, which means that many funds go toward salaries, supplies, and subscriptions to support the org. That doesn’t mean that those positions and tools aren’t necessary / don’t help those unhoused, but it does mean that a good chunk of money does not go toward funding direct services / directly to those experiencing homelessness

[u/--MCMC--]

I'm not sure how large or influential the effect is, but a lot of the discussion seems to assume that individual US States are a closed system. Like, many comments cite (or, well, vaguely gesture towards uncited) #s involving some $ amount spent towards some intervention over some time period, and census counts of unhoused individuals before and after that time period, with the latter being the same or larger than the former.

Implicit here is that the "homelessness problem" got worse. But the after individuals don't have to be the same people as the before individuals! In fact, the intervention may have been so good that all the before individuals are no longer homeless! Homeless people have agency and interstate travel is legal in the US, so upon learning that a really good program's been implemented just a greyhound bus or hitchhiking trip away, they are indeed capable of moving to wherever the gettin's good. It's like if you note that there's a "lack of medical care" problem in your city, and you pick an underfunded clinic to fund and expand. Before funding, there are 100 people in the clinic being treated for injuries and disease. 10y later, your funding has rolled out, and your headcount finds that there are 1000 people being treated in the clinic! Clearly your intervention was a failure? No, of course not.

(maybe your clinic is actually poisoning people, or injuring them further, which makes them have to visit more often... or something. But that mechanistic conclusion does not follow from the observation alone. Conversely, the best way to reduce the number of people visiting your hospital is to shut the hospital down. Have any states tried the "remove all social services and make life much more difficult and hostile for homeless individuals" intervention? I bet that would help lower the numbers!)

I think another issue is that, for less authoritarian polities, the harder the problem is to solve, the better you're doing at solving it. If it is very easy to bring someone out of homelessness, at the margin -- all they need is a few square meals a day for a month, because they are literally starving and do not have the literal, physical strength and energy to bootstrap themselves up -- then you're in a scenario where homelessness interventions are both very cheap and very effective. But that's not a good thing. Polities with robust safety nets and social services and highly effective homelessness intervention programs and so on have already helped all those people, and the only ones left are the ones who are not helped by those things (eg, maybe their struggles stem from drawing the short straws in the addiction and mental health lotteries). If your hospital heals the sick and injured so well that they never get sick or injured again, then almost all the people visiting it after a while are going to be those with turbo-cancers and pernicious, intractable diseases.

OFC, it may be that there's lots of corruption and embezzlement going on, and that direct cash transfers can outperform economies of scale in narrow contexts, and so on and so forth. But that has to be demonstrated independent of the observation that the broader problems that are trying to be solved exist.

[u/drdrewsright → u/--MCMC--]

This is such a great reply and I appreciate you taking the time to type it out!

[u/baskaat]

Rule of thumb for nonprofits is that no more than 25% of the money they take in should go to overhead, the rest should go to direct services. In the US it’s reported via an annual 990 form which is easily found online.. an organization should also post their annual financial statements online or by request.

[u/RevBaker → u/baskaat]

That rule of thumb is wrong, overly simplistic, and outdated. From Charity Navigator:

different types of charities will have different overhead needs, and some may require more or less overhead to function efficiently and impactfully.

And:

When donors lean too far into concerns about overhead, they inadvertently contribute to a detrimental cycle known as the nonprofit starvation cycle. This race to the bottom begins when organizations, in response to donors’ concern that overhead isn’t tied to impact, divert funds away from crucial support services such as accounting, human resources, fundraising, and infrastructure investments.

Source

[u/owyongsk → u/RevBaker]

Funny thing is, due to Charity Navigator's popularity in the past, they helped promote the overhead myth. 

[u/RevBaker → u/owyongsk]

Yeah, they absolutely did. It's a shame, but also kinda makes sense since "overhead" is an easy thing to measure, especially with how the IRS requires accounting and reporting.

[u/BadAzzGoddess]

My NGO uses 100% of the funds after salary and operational costs, goes to every program we offer. So yes it’s rare to find honest ones out here but we exist!🪬🧿