Doubling Down on Failed Housing First Approach to Homelessness

 

James Whitford
Founder & CEO
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This article was originally published on DC Journal/Inside Sources on March 15, 2023.

 

In a largely symbolic resolution sponsored by Rep. Maria Salazar (FL-27) in January of this year, a bipartisan majority of the House voted to repudiate “socialism in all its forms.”

The resolution highlights the history of starvation, genocide, and devastation caused by socialist leaders and their policies—and the 328 congressmen who voted in favor of it are now on record opposing the implementation of such policies. Yet, while Congress may be on record in opposition to redistributionist policies, the Biden administration’s U.S. Interagency Council on Homelessness (USICH) “All In” plan issued in December indicates the White House may not be.   

The USICH sets lofty goals for reducing homelessness by doubling down on the failed Housing First program—something taxpayers have funded for more than a decade at a price tag exceeding $16 billion, only to see homelessness increase. The USICH themselves have admitted that though “funding for homelessness assistance has increased every year,” the unsheltered population has grown by a staggering 20.5% nationally. 

The All In claim that housing is the solution to homelessness reveals a failure to acknowledge the deeper issues, such as broken families, mental illness, and addiction.

Going All In is a risky bet on a bad hand—and made more dangerous by betting with taxpayers’ money.

The president’s proposal attempts to justify the wager by playing on the fears of elderly Americans and their families by claiming that there is “no housing market in the U.S. in which a person living solely on Supplemental Security Income (SSI) can afford housing without rental assistance.” The truth is, only 1.8% of seniors are living on SSI alone—and for those who are, the average monthly SSI payment for an eligible couple is nearly twice that of the average rent in some of the nation’s most affordable cities.

Further, the president’s proposal offers support for increases in rental and utility assistance without income or asset verifications. Programs like these trap individuals in welfare at the taxpayer’s expense. Welfare expansion has a long history of compounding our nation’s most pressing public crises, not solving them—and homelessness is no exception. 

In my community, the flow of stimulus checks, extended unemployment benefits, and housing assistance that resulted from the 2021 American Rescue Plan Act perversely incentivized welfare over work. We now have a situation where most individuals coming into our homeless mission in Joplin, MO, tell our staff that they are waiting on a housing voucher and are less interested in offers for employment.

Regarding everything from “supply” to “compensation,” the word “increase” is used 51 times in the USICH report. Increases not mentioned are those related to inflation, taxes, and budget deficits that would ultimately come on the heels of expanding taxpayer-funded housing subsidies. Also not noted are the increases in generational poverty for families that will become indefinitely trapped in the welfare system. This, by definition, is socialism. It is horrific—and 328 congressmen were right to condemn it.

Thankfully, there is a safer bet. 

For more than two decades, our privately-funded mission, along with a few hundred others like it across the nation, has been helping people escape homelessness and achieve lasting independence through relationship-building and accountability programs. Even better, privately funded missions like these and innovative private models such as tiny home communities are less expensive and do a better job of compassionately helping our homeless neighbors. 

This growing movement of private, compassionate, effective charity has the winning hand when it comes to addressing homelessness—it’s time for the federal government to fold theirs.


Houselessness Isn’t the Problem and “Why” Isn’t the Only Question to Ask

 


James Whitford
Founder & CEO
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 This article was originally published in The Joplin Globe on December 18, 2022.

 

Have you noticed an increase in the homeless population in your community? You’re not alone. In the United States, homelessness has been on the rise for the last handful of years. Since 2015, the number of people living in tents, camping under bridges, and wandering the streets has increased by 31% from 173,000 to 226,000.  

Why has this happened? That is the question every mayor, downtown business owner, and nonprofit leader wants answered. Unfortunately, there is no simple answer for the quarter million people living on the streets. The reasons for each individual’s homelessness are complex and unique.  

I have encountered thousands of homeless individuals, each with his or her own unique story. One woman, Betty, lost her husband and then found herself on the streets after a breakdown in her relationship with her family. Mike, on the other hand, ended up homeless after years of neglect and abuse at the hands of his alcoholic parents. The “why” is different for every person and trying to answer it from a 30,000 foot perspective often results in government-style central planning that simply masks the symptoms without ever addressing the distinctly unique source of each individual’s struggle. 

Often, policymakers believe that the cure to homelessness is simply housing. But a house only addresses a symptom, not the source of the problem. This is why, 10 years and $16.2 billion later, the government approach of Housing First has proven a failure. A house doesn’t end addiction or treat years of trauma. As a result, oftentimes people either leave their government housing or sadly, die from their untreated afflictions. Homelessness isn’t an epidemic to be treated with a house as if housing is the cure. Houselessness isn’t the real problem and “why” isn’t the only question we should be asking. We should also be asking, “How?” 

I asked that question of five unsheltered individuals who admitted they couldn’t take shelter in my mission because of drug use. “How are you continuing to support your habit? How are you living on the streets?” Without pause, they gave me three responses: selling food stamps for fifty cents on the dollar, selling government subsidized cell phones for fifty bucks a pop, and panhandling. The epidemic is not homelessness or houselessness. It’s dependency. 

Dependency is a national epidemic, supported by the fact that there are about five million more people dependent on the USDA’s Supplemental Nutrition Assistance Program (SNAP) than there are people in poverty (42 vs. 37 million). There are ongoing debates surrounding the integrity of the SNAP program and level of abuse, but whether chronically homeless people are misusing food stamps or not, they’re often dependent on them. Whether they use government phones for personal use or sell them, they’re dependent on them. Whether or not they use money given at the corner while holding a cardboard sign for clothing or drugs, they’re dependent on it.  

So, let’s solve dependency. The first step is to measure it. It’s easy enough for a community to measure dependency on panhandling by point-in-time counts through the year. We have even figured out how to measure dependency on local nonprofits through a tool that measures recidivism, or the number of times clients return to charities for help. But measuring dependency on welfare programs has been a more difficult problem to solve.  

Most departments of social services at state capitols report welfare data at the county level, not the city level, leaving each city’s leadership without a clear baseline of welfare dependency. It was like this in my state of Missouri, as well.  

Next year that changes. Thanks to a joint effort by True Charity Initiative and the Foundation for Government Accountability, the governor signed off on the 2023 appropriations bill that requires social service offices to break down welfare usage by community—including dollars spent and the number of people dependent on every program. And Missouri mayors are thankful. The former mayor of Joplin, Ryan Stanley told me, “A county-wide number is too broad and treats all cities as though we are the same. True and timely data create real and accurate pictures of who we really are.”  

It still takes real compassion, respect for human dignity, and a sincere interest in why a person is homeless to help someone who’s homeless. It worked for Betty, and it’s working for Mike. A personal approach represents the cure to deep and chronic poverty, but for the medicine to take, we must dry up dependency.  

We must eliminate repetitive handouts that place the recipient in a position of expectation that progresses to entitlement and dependency. It’s what traps people standing on street corners begging and sleeping under bridges instead of in houses. That dependency on public and private charity can now be measured in Missouri cities. There is no reason we shouldn’t establish a baseline and then get to work in our communities to improve it.

 

Expanded camping access won’t solve homelessness

 

While giving a city leader a tour through Watered Gardens, my religious group’s mission in southwest Missouri, I saw Josh, a man in his later 20s, wiping down tables in the dining room. As I introduced the two men, Josh shared how thankful he was to be in a place that provided the tools he needed to overcome addiction and homelessness.

He commented that he “was never required to work” in previous programs with lax qualifications for assistance, which led to his getting “in a lot of trouble.” He added, “What I really needed was this.”

Josh’s previous stay in public housing, through a Housing and Urban Development Department’s Housing First program, expected little of him — and delivered even less.

Housing First is intended to quickly connect people experiencing homelessness to permanent housing “without preconditions such as sobriety, treatment or service participation requirements.” Yet, it has the unfortunate result of trapping people in a cycle of dependency. Without support for a life change, it is no wonder Josh fell back into homelessness before coming to our facility.

One of the clearly stated objectives of the Housing First program in a 2010 report put out by the federal Interagency Council on Homelessness was to “provide permanent supportive housing to prevent and end chronic homelessness.” Ten years and $16.2 billion later, the same federal agency admitted that while “funding for homelessness assistance has increased every year,” “unsheltered homelessness increased by 20.5% nationally.”

One young homeless man named Seth admitted to me that he had left his living arrangement with his mother and grandmother because a Housing First agency worker told him that as a homeless person, he could probably qualify for a free apartment. Another homeless man looking for work told me that when he answered “yes” to an agency worker’s question as to whether he had ever suffered trauma, he was referred to a psychiatrist, given a diagnosis, and put on a housing waiting list. He later told me, “I just wanted to get a job.” No consideration was given to what his true needs were.

Increasingly at our mission, we hear that people are waiting on public housing, rather than that they’re looking for work. Work restores dignity and provides an escape from dependency, while welfare does quite the opposite.

Federal housing grants that incentivize organizations to cast a net into a community and drag individuals into a welfare trap have rules that create generational poverty and disincentivize work. This is bad for communities and worse for families.

For those who truly need assistance, programs should focus on transition to independence, not total reliance on the government. But changes to the law regarding transitional programs must be cautiously approached.

During my more-than two decades of working with the homeless, I have witnessed increased numbers of unsheltered homeless alongside increased government welfare incentives. So, I was surprised to learn that my home state of Missouri was doubling down on this approach.

The recently enacted Missouri House Bill 1606 is an attempt to solve some of our state’s growing homeless challenges — but it won’t have the intended effect that some lawmakers had hoped for. Beginning Jan. 1, state and federal funds will be made available for “parking areas” and “camping facilities” to be used as “housing” for homeless individuals. Its attached fiscal note gives a hyperlink to 39 Missouri State Parks that are “possibly able to support the homeless … six months at a time.” This is a lose-lose situation.

A quick review of the bill reveals a misaligned stick-and-carrot approach. The carrot leads shelter operators to performance payments and bonuses if they meet or exceed guidelines. The stick allows the Missouri Attorney General to sue communities that don’t meet enforcement policy expectations against sleeping or camping on public sidewalks. And homeless individuals who “camp” without authorization will now be subject to a class C misdemeanor.

Essentially, government-funded “camping first” policies will incentivize publicly funded charity groups to become even more reliant on taxpayers while making criminals out of individuals who are experiencing homelessness.

All of this, on top of the grave public safety concerns with housing individuals in areas intended for family recreation, creates a lose-lose situation for the Show-Me State.

Camping First is doomed to fail for the same reason Housing First has failed — it impersonally focuses on a societal problem rather than the individual. It will not help men like Josh or Seth transition into a life of wholeness and prosperity.

Genuine compassion offers individuals an opportunity to flourish through the building of meaningful relationships with accountability. And an impersonal government increasing the scope of public housing will not result in long-term freedom from dependency for those ready to experience it.

 

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The Child Care System Is Broken. Community-Led Solutions Can Fix It.

 


Bethany Herron
Instructional Designer
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Scott Centorino
Senior Fellow, FGA
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 This article was originally published in The Joplin Globe on November 14, 2022.

 

I (Bethany Herron) became familiar with the brokenness of the child care system as an instructional designer for True Charity Initiative. Through my work, I have heard many stories of hardworking parents who have faced the prospect of having their kids placed into foster care due to an inability to find safe and affordable child care options while they are away at work.

In a recent conversation, Jennifer Johnson, a former lawyer turned child care cooperative director, told me, “Many of the women (she) represented were good mothers. They loved and desired to parent their children. However, they just couldn’t figure out how to work and pay for child care.” Jennifer’s story represents similar conversations that I have had with pregnancy care center directors, child care centers and nonprofit leaders.

Recently, I (Scott Centorino) have seen that same brokenness from a new and life-changing angle — parenthood. I used to see child care access and affordability as distant reasons to write op-eds on broken public policies. But as a father, sitting on a waiting list to get my newborn into the only child care center in our rural county that serves infants, the child care crisis has become personal.

We, along with countless parents across the nation, agree it’s time to introduce solutions that increase access to safe, affordable and flexible child care that help ease the burden for parents who just want to provide for their families.

Over the past three years, more parental rights and less unilateral bureaucratic control have become popular solutions for access to quality education in public schools. It’s time we take the same approach to child care.

Throughout the pandemic, communities banded together to lift up their own. Child care cooperatives, nanny shares and outdoor learning pods — also known as microschools — popped up across the nation. This was made possible through temporary suspensions of child care regulations in areas ranging from staff-to-child ratios and group size limits to physical space restrictions and educational requirements for workers. These changes were made to drive down the cost and drive up the supply of child care.

Predictably, the free market worked. Communities used their creativity and ingenuity to develop solutions to a crisis that allowed qualified individuals to care for more children while keeping kids safe.

Continuation of these model community solutions, unimpeded by bureaucratic interference, could help young single mothers form child care co-ops so they can attend school or work. Driven couples striving to transition from government assistance could share the child care burden between families. Yet, in many states, this kind of community-driven effort is illegal under restrictive child care licensure laws.

Even before the pandemic, the average family with children under 5 spent 13% of their income on child care, 5% more than the upper limit of what is considered “affordable.” This number is only going to climb as we face record inflation.

The Federal Reserve Bank of St. Louis has released a new study showing that more flexibility in staff-to-child ratios could help keep costs down for families. This mirrors a report by the Mercatus Center published seven years ago.

If, during the pandemic, policymakers understood that simply letting parents choose from a greater number of less restricted child care providers would help families, why shouldn’t the government do the same now? Reducing staff-to-child ratios will expand access to affordable care that allows parents to work and better avoid the pitfalls of government dependency.

With this new inflation crisis and worker shortages, the last thing we need is higher child care costs and more parents leaving the workforce.

 

Want to learn about solutions for your community to help ease the burden of child care for those in poverty? The Childcare Solutions Model Action Plan (MAP) provides ideas and practical steps to do just that. (Learn more about MAPs.)

MAPs are just the tip of the iceberg for the practical resources available through the True Charity Network. Check out all of the ways the network can help you learn, connect, and influence here.

Already a member? Get access to all of your benefits through the member portal, including the Childcare Solutions MAP.

 

FROM THE TRUE CHARITY TEAM: We appreciate the perspective of our knowledgeable guest contributors. However, their opinions are their own, and do not necessarily represent positions of True Charity in all respects.

 

Forgiveness Is a Virtue. Student Debt Transfer Is Not.

 


Savannah Aleckson
Events Director
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A version of this article was originally published by The American Spectator on September 3, 2022. 

 

President Biden recently announced his plan to forgive up to $40,000 dollars of student loan debt per household making up to $250,000. I wish he had told me about that when I had $1.50 in my bank account and was eating a balanced diet of green beans and Captain Crunch so I could graduate from college debt-free. 

Use of the term “forgiveness” to describe President Biden’s latest political move obscures the true effect. The debts will not simply vanish at the stroke of the President’s pen. “Transfer” would be a more accurate descriptor. Better yet? “Injustice.”

Who will bear the brunt of the shifted weight of student loan debt? The very people President Biden intends to help—middle and working-class Americans—with concentrated harm to those who made smart fiscal choices.

Here’s how: First, it rewards the wrong behaviors. The premise of a college degree is that it increases your lifetime earnings enough to justify its expense. If it doesn’t, then college isn’t right for you.

As recent college graduates, my husband and I put a lot of thought into our higher education and made significant sacrifices to do it the right way. We’ve sacrificed income and standard of living to increase our earning potential and worked hard to ensure we accrued minimal debt along the way.

Do we require a pat on the back or a federal subsidy to do so? No. We will earn back what we’ve lost in future income because we were thoughtful about our fields of study and employment choices. 

While I was skimping and saving to minimize debt, many of my peers were living large, making thoughtless choices about their field of study and are now making minimum payments. As a result of their profligacy, they have large debt balances outstanding while we have paid off our minimal loans. 

This should be the part of the story where they learn a life lesson. Imagine my surprise when I found out that the life lesson was for me: that I was eating cereal for dinner so I can now pay for my profligate peers’ burgers and beers through higher taxes and inflation.

Inflation is a certainty with a massive spending initiative like Biden’s student loan debt repayment plan, with a price tag that could exceed a trillion dollars. For perspective, government direct payments to individuals in the COVID-19 relief effort totaled 931 billion dollars, and the inflationary effects are well-documented. 

But at least I and many other college graduates have a middle class income with which to absorb the added expense. Inflation poses a much grimmer problem for low-income Americans, many of whom, in a sad irony, don’t have a college degree at all.

Second, it makes good jobs harder to find for working class Americans. There’s a less commonly known but still very real form of inflation: degree inflation. 

As it turns out, federal programs that pay for college are a two-edged sword. As more people attend college, more employers now see a bachelor’s degree as a basic qualification—even when the job didn’t require one before. One study points out that historically, 16% of production supervisors have held college degrees. Currently, however, ‘67% of job openings for these positions require bachelor’s degrees.'”

More occupations have fallen prey to this degree inflation, including ones that were previously some of the most accessible to the poor, including administrative assistants and childcare workers.

The bottom line? A college degree is no longer considered advanced education but is rather a basic requirement for previously accessible work. This locks the poor out of honest employment opportunities—unless they join the hordes taking out massive debt for increasingly common degrees.

Finally, this does nothing but drive up the cost of college education.

Any modicum of self-restraint and careful planning borrowers should have will certainly be destroyed as they see their school debts less like a loan to repay and more like a meaningless number that can be crossed out by the President’s pen. And universities will leap at the opportunity to make more money from borrowers with all brakes removed. 

As a result, future college students can expect an even higher bill to earn a basic degree—and with it, even more crushing debt. Anyone whose dad doesn’t drive a Porsche is going to have a harder and harder time getting a college degree.

Biden states that his student loan debt plan is to help the working class get a leg up. Sadly, not only will it not do that, it will make the bottom rung of the ladder to success an even higher reach– leaving increasing numbers unable to make it on the ladder at all. 

A virtuous policy is one which rewards the right behaviors, lets reality punish the wrong ones, and makes it easier to earn an honest living. Let’s not confuse President Biden’s student loan debt plan as such.

 

How Offering Restaurants Through Snap Fails Us All

 


James Whitford
Executive Director
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This article was originally published on May 5, 2022 in The Missouri Times.

 

In May 2022, a majority of the Senate of my home state, Missouri, passed legislation to expand benefits of the food stamp program, SNAP. The bill, if passed by the House and signed into law by Missouri Governor Mike Parson, would allow elderly, disabled, and homeless individuals to use their SNAP cards in participating restaurants.

People may like that additional benefit but many, like Bobby, don’t need it. 

Bobby’s small frame and upbeat energy doesn’t quickly reveal his history on the streets. He’s been chronically homeless and a struggling addict for more than 20 years. He finally got free. For the first time in his adult life, he has gainful employment and to top it off, he voluntarily gave up his food stamp card just last month. He handed it to me, gladly exclaiming, “I don’t need it anymore.” I asked why. “I’m working and staying at the mission. Plus, it’s easy to sell them to support a habit.” 

As Franklin D. Roosevelt said, “We have here a human as well as an economic problem.” Speaking about welfare in the midst of great deflation, FDR said in his 1935 State of the Union address, “The lessons of history … show conclusively that continued dependence upon relief induces a spiritual and moral disintegration fundamentally destructive to the national fibre. To dole out relief in this way is to administer a narcotic, a subtle destroyer of the human spirit.”  

Today, legislators are debating welfare in the midst of great inflation. More than the differences in economic environments, the talk is different today, too.  

Whereas FDR may have considered a bill like SB 798 just another dose of a destructive narcotic, minority senate leader, John Rizzo, said, “It’s going to give more people options for healthy food and be a part of society and go into a restaurant.” 

Even if one applauds the government’s support of more than 42 million Americans currently dependent on the USDA’s food stamp program, it’s foolishness to contend that expanding the program to include restaurant access will improve health.

Arizona joined five other states and passed a similar law at the end of last year. Burger King, Dairy Queen, KFC, Taco Bell, and McDonald’s are a few restaurants on a long list that now accept EBT payments. According to the NIH, though, fast food is the cause, not the solution, of early stroke and other risks for people in poverty.   

Regarding “being a part of society,” Senator Rizzo’s heart seems to be in the right place. The building of social capital (relationships with others not in your immediate circle) is vital for a person to beat poverty. More than two decades of work in helping people escape homelessness and poverty has convinced me that there is nothing more important than building real relationships that bridge socioeconomic divides.  But the thought that bolstering benefits on a food stamp card will accomplish that is laughable. In fact, just the opposite will occur if Missouri passes this bill into law. 

Rather than visit churches, soup kitchens or missions like mine for a hot meal where volunteers will reach out with compassion and a listening ear, many of the homeless will hit the local Wendy’s instead.  And who needs locally driven programs that connect willing people to help the elderly with meals, when the state steps in to feed you?  

Legislating compassion always crowds out the source from which charity is delivered most effectively: private citizens. Democrat President Grover Cleveland got it right:

 

“Federal aid in such cases encourages the expectation of paternal care on the part of the government and weakens the sturdiness of our national character, while it prevents the indulgence among our people of that kindly sentiment and conduct which strengthens the bonds of a common brotherhood.”

 

Bobby has given up any “expectation of paternal care on the part of the government” and he loves it. “It feels great!” he said. “I’m integrating back into society. I’m a human being. People used to call me an animal. They don’t look at me like that anymore. My people I work with love me and I love them. I’m doing something. I’m not just sitting still and dying.”  

We have a choice. We can support policy that reinforces the “sturdiness of our national character” and “strengthens the bonds of common brotherhood,” or we can support an expansion of a state program that will continue to widen the relational and economic gap between those who have and those who don’t.  

More reliance on the state’s food program will not only fail to improve physical health, but it will increase government dependency while crowding out more of what compassionate community members can deliver—real relationships required to help those struggling in poverty lead a flourishing life. Like FDR said, it’s more than an economic problem. It’s a human one, too. 

 

 

Photo Source: The U.S. Sun 

 

Throwing Government Housing At The Homeless Is Treating The Symptom

 


James Whitford
Executive Director
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This article was originally published on April 25, 2022 in The Federalist.

 

Debate over the term ‘homeless’ versus ‘houseless’ doesn’t provide a real solution, and neither does just offering a place to live.

Nathan wasn’t just “houseless,” he was homeless. The young man I befriended at our mission in southwest Missouri was one of those unsheltered homeless guys you might catch a glimpse of on the news as a camera pans a row of tents in a city encampment.

Yet for describing people like Nathan, some are beginning to use the term “houseless” instead of “homeless.” One non-profit based in London, Unhoused.org, rationalizes the shift by saying, “The label of ‘homeless’ has derogatory connotations. It implies that one is ‘less than’, and it undermines self-esteem and progressive change.”

 

Similarly, policy analyst for the American Civil Libertis Union of Southern California, Eve Garrow, shared in a 2021 Architectural Design article, “Homeless has become intertwined with narratives that are toxic. It deserves to be retired.”

Of course, “derogatory connotations” and “toxic” associations are not the cause of the current homeless crisis in America. Nor is a semantic shift toward using the term “houseless” going to put us on a road to helping people into a flourishing life off the streets.

In fact, the term “unhoused” inaccurately isolates and unjustly reduces the complexity of the problem, leading toward an embrace of more simplistic solutions. If a person is “houseless,” then the answer to his problem is, of course, a house.

The U.S. Department of Housing and Urban Development seems to be under this impression. It recently projected an $11 billion increase in spending for the upcoming fiscal year that includes $32.1 billion – the largest increase ever – for its Housing Voucher Program.

 

However, Nathan admits that, for him, the need is for much more than a house. He didn’t land in our mission’s respite unit to finish his recovery because he lacked a house. He has a broken heart stemming from an alcoholic father who physically abused him until he was seven, when his mother finally divorced. He began drinking at a young age and his addiction landed him on the streets at age 35. A house won’t solve his problem.

Leaders like L.A. Mayor Eric Garcetti disagree. A little more than a year ago, in a keynote address titled, “Unhoused: Addressing Homelessness in California,” Garcetti said, “The only thing that this very diverse group of people … have in common is that they are unhoused. So the solution is housing.” Meanwhile, chronic homelessness in L.A. spiked 68 percent in the last year. Maybe there’s more to it than just housing.

Treating the problem of homelessness like its “houseless-ness” can be likened to treating diabetes like it’s lethargy. Certainly, sluggishness or lethargy is a part of diabetes. Although we may first think to treat our own late afternoon lethargy with a chai latte or a cold Dr. Pepper, that treatment fails the diabetic. Why? Because addressing symptoms is much different than addressing pathology.

The pathology of a disease or social illness is the processes that are often unseen but are the primary contributors to the constellation of symptoms we commonly do see. We’ve got the diagnosis right. It’s homelessness. And although the primary symptom may be houseless-ness, treating the problem by providing housing merely addresses the symptoms. Just as prescribing a chai latte for the lethargic diabetic fails the individual, so also prescribing housing to treat the symptoms of homelessness has failed us all.

 

In the last five years, America has experienced a 28 percent increase in unsheltered homelessness, all while we’ve been feverishly treating the symptoms. In the last 10 years, HUD funding increased 24 percent, having funneled nearly $20 billion into a variety of “housing-first” approaches that focus on providing everything from first-month rent assistance to fully subsidized housing.

We’re certainly spending a lot to address the symptoms of homelessness. A bit more than $625,000 of those HUD dollars just landed in my own city. A lot of people are excited about that and, initially, Nathan was, too. But after talking through it, he realized he had the ability to work, save his money while staying at our mission, and get his own apartment without government assistance.

Rather than accepting the label “houseless” and grabbing his free housing, Nathan stayed at the mission until he saved enough to get his own apartment. Beyond earning and saving, something more important happened while he was at our mission. We became friends. Therein lies the best prescription for the problem: relationship development, or building social capital.

Ultimately, the cure is found in the context of friendship, because the pathology is always based in some aspect of a broken relationship, whether it be between a person and his family, a person and his community, or a person and his God. Nathan admitted he wasn’t just homeless. He was “homeless and hopeless.”

Hope — real hope — will never be found in a government-provided rent check, a HUD housing voucher, or some other housing subsidy. It also won’t be discovered because we quit using the word “homeless.” Ask Nathan. The problem isn’t whether he’s called homeless or unhoused. The problem is that most people don’t know his name.

 

Please Stop Donating to the Worst Charity in America: There Are Better Ways to Help

 


Nathan Mayo
Network Director
Read more from Nathan

 

 

A version of this article was originally published in The American Spectator on February 25, 2022.

 

Be on the lookout for this postcard in your mailbox: “Our charity guarantees that 35 percent of your donations will provide toxic chemicals to the down and out. Your crucial support enables the mentally ill to isolate themselves from people who care about them and spiral into irreversible mental and physical destruction. We can’t do it without you. Give today! (Please note that we can only accept cash to avoid all accountability to supporters and the IRS).”

As hard as it is to believe, this is a real “charity.” While they tend to rely on word-of-mouth and signage rather than mailers, they do have affiliates in all 50 states. They receive both public and private funding. As many as 68 percent of Americans donate to them annually, and the national and local government supports this cause with everything from cash to “safe smoking kits.”

The sad irony is that many Americans who were outraged by news that the government is funding crack pipes and needles for drug abuse have been personally donating toward the crack and meth to fill them. (The HHS later denied the pipes but confirmed the needles.)

I’m talking, of course, about giving cash to panhandlers. There has been a fair deal of research about panhandlers, and we know a lot about them as a group. According to a representative study from Orlando, 92 percent admit to being addicted to drugs and alcohol. They self-report spending no less than 35 percent of the money they receive directly on their addictions. Panhandling typically yields more cash than minimum wage (tax free) in addition to in-kind donations and government benefits.

Individual Americans are just following the lead of their elected officials. Major U.S. cities such as San Francisco have taken subsidizing a life on the streets to the next level with “safe sleeping villages” that cost a jaw-dropping $61,000 per tent, per year. Prior to the pandemic, New York City doubled annual spending on homelessness from 2014 to 2019. The result? Homelessness rose by 16 percent.

The actions of kind-hearted donors and politicians both fail because they ignore root causes.

Individuals who spend their days asking for money almost always suffer from a broken personal support structure. If they had friends or family with whom they could stay while they got back on their feet, they would. Perhaps this is why 80 to 90 percent of panhandlers are men. Men aren’t more vulnerable to hard times than women, but they are more susceptible to both addiction and severing relationships.

While panhandlers are mostly homeless, it is important to note that most homeless people aren’t panhandlers. Most people in temporary emergencies do not ask for money on street corners. Four out of five homeless people are in a temporary situation that they eventually work through. The people left on the streets with the signs are the chronically homeless with mental illness (30 percent) and severe addictions.

Regardless of these trends, there is some logic to giving them cash. The basic economic view is that individuals know better than outsiders how to use resources to improve their own situation. If those resources happen to be alcohol or opiates to self-medicate, who are we to protest? In possible evidence of this view, unconditional cash transfers to people in developing countries have been shown to improve their quality of life in measurable ways.

The problem with this logic is that while cash will likely help a random sample of Americans or Kenyans with reasonable amounts of social support, panhandlers are not a random sample of the population. As outlined above, they are dramatically more likely to have addictions, traumatic pasts, and severe mental illness. Intoxication, withdrawal, trauma, mental illness, and extreme poverty each have severely negative effects on people’s ability to make choices they won’t deeply regret the next morning.

Even for the best decision-makers, small amounts of cash and $61,000 tents don’t provide the real opportunity a panhandler needs. It’s hard to save up enough money to get ahead while living out of a backpack. Given this bleak outlook, it’s no wonder that some will choose to spend the pocket change kind strangers give them to join the 100,000 Americans who died from drug overdoses last year.

So don’t stop giving, but give in a way that creates real options. Freely offer them what money can’t buy and what every human needs — meaningful relationships.

Relationships with people who care about them provide both the motivation and the opportunities struggling individuals need to achieve a flourishing life. It may not be possible for every passerby to befriend a person with a sign, but you can support real charities with caseworkers and volunteers that do. Good nonprofits help with mental health, addiction recovery, and stabilizing families. They provide emergency shelter, housing with supportive communities, and work-readiness training. In other words, they provide a path off the streets, not just a way to eke out one more dismal day.

Make no mistake, panhandlers are not living the good life at the expense of uninformed people. Living on the streets is a uniquely lonely, dangerous, and degrading misery. Indeed, panhandlers are living a terrible life at the expense of ignorant people. Stop subsidizing misery and facilitate flourishing instead.

 

Let’s Stop Kidding Ourselves About SNAP

 


Nathan Mayo
Membership Director
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A recent administrative action has permanently increased benefits for the Supplemental Nutrition Assistance Program (SNAP) by 25%. Unfortunately, this historic boost fails to address that the current structure of this nearly 60-year-old program does little to accomplish its purpose. The official SNAP webpage proudly proclaims that, “SNAP provides nutrition benefits to supplement the food budget of needy families so they can purchase healthy food…” To that admirable end, the program formerly known as “food stamps” distributed 79 billion dollars to 40 million people last year. Yet this desire to provide wholesome food to needy families conflicts with clear evidence that wholesome food is not what they think they need. Whether they play by the rules or not, people receiving SNAP benefits currently spend between 70% and 100% of that benefit on items other than healthy food.

Government researchers determined that average SNAP recipients increase their food expenditure by only 30% of the value of their benefits. In other words, a person previously spending $300 on food a month who qualifies for $100 of food stamp benefits will start spending $330 on food and shift the $70 from his existing budget to other purposes. This surprisingly low percentage suggests that food is not recipients’ top priority, as people who were in dire need of food would be expected to boost their food budget by the full value of the benefits.

What of the hope that needy families will buy nutritious food? According to a study of a major retailer, recipients spend about 20% of their total grocery budget on junk food, with soft drinks as the top purchase—enough to supply a family of four with 20 two-liters of soda per month. Given the marginal amount of SNAP spent on food and the typical benefits for a family, SNAP literally expands the grocery budget by the exact amount needed to cover the junk food. SNAP recipients also spend about 27% less on fruits and vegetables than non-SNAP households. This difference cannot be attributed to a lack of access because around 85% of SNAP purchases are made at large chain grocery stores with vast produce selections. One factor in these choices is likely smaller grocery budgets and the fact that fresh produce is more expensive.

A less savory contributor to this poor nutrition may be that SNAP encourages unhealthy purchases through the “house money” effect. When gamblers win money, they are less careful with their winnings since they view the “house money” as more disposable than their own cash. Similarly, when people receive SNAP dollars, they are sometimes less careful about their purchases than they would be with their hard-earned dollars. In my role working with poverty-focused nonprofits, I recently came across a woman who recounted how she helped her housemate apply for SNAP and proceeded to help her spend all of their new “fun money” on bags full of candy, soda, and snack cakes.

Additionally, while SNAP is often lauded for its miniscule fraud rates of only around 1%, this figure only counts detected fraud. A higher rate seems more sensible to people who regularly work with SNAP recipients. A few weeks ago, I spoke to a young man in a stable situation who drew SNAP benefits and gave the card to his ineligible mother. In his defensive words, “everyone I know is doing it.” If SNAP investigators are similar to IRS investigators, it is safe to say that they do not detect all fraud. The IRS estimates that they uncover a mere 6% of all tax fraud, or $60 billion recovered of up to $1 trillion in evasion. If the same detection rate holds for SNAP, that would equate to a fraud rate of 15%.

In addition to eligibility fraud, SNAP cards or groceries are regularly resold to others. Reports across the nation confirm that the going rate for this type of fraud is 50 cents on the dollar (MA, MI, GA). This discounted rate points out that SNAP benefits cost twice as much to taxpayers as they are worth to many recipients.

Our good-hearted attempt to provide wholesome food to needy families does not work as we intend. The small effect that SNAP has on grocery budgets and the steeply discounted resale value prove that the nutritional benefit of SNAP is a fraction of what it appears to be. While recipients surely appreciate the boosted spending power, their actions signal that their true needs are more complex than one-size-fits-all programs can address. Not only do in-kind benefits programs like SNAP completely sidestep root causes of poverty, but in many cases, their image of delivering vital sustenance to people in need is mere illusion.

 

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People in Poverty Need Financial Knowledge—Here’s Why Most Financial Classes Are Failing Them

 

Nathan Mayo
Network Director
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An in-depth survey on who uses expensive payday loans and why showed that lack of financial knowledge was a significant factor. According to the surveyors, “On several occasions, borrowers in focus groups equated the simple interest rate (e.g., 15 percent for a loan with a $15 per $100 fee for two weeks) with the Annual Percentage Rate disclosed for a credit card (which might be 15 percent on an annual basis).” This lack of knowledge can and often does lead to terrible financial decisions. 

While critics often assert that the poor are the best money managers by necessity, the evidence does not support the claim. In the Federal Reserve’s tri-annual financial survey, the top quartile of households scored about 38% better on very simple financial literacy questions than the poorest quartile. Upon closer examination, this lack of financial literacy is not a special characteristic of poverty but rather is a secondary connection to lower formal education among low-income households. 

Certainly, knowledge is not the only barrier to financial prosperity. If the poor had more income, they would also have an easier time maintaining cash savings, investing, and not needing payday loans. But, insofar as they sometimes do have other options, more knowledge would certainly benefit them. The poor are more likely to fall for “rent-to-own” schemes to pay for household appliances. Of the 12 million Americans who use payday loans each year, most do not use them for emergencies but rather take an average of eight loans a year and pay $520 in interest. Seventy-seven percent report using payday loans for recurring expenses, including cable subscriptions or optional purchases such as weekend getaways. 

In fact, this missing financial knowledge may be even more important to the poor than to the middle class, because the middle class often have default access to asset building tools like 401(k) plans and home ownership. Wealth building tools are more democratized than ever—with as little as $1 and internet access, anyone can invest in funds with quality stocks and bonds, but you must be informed in order to take advantage of them.

To non-profit and policy leaders the solution seems simple: educate the poor. Unfortunately, such education often has far less impact than intended. According to an oft-cited analysis of 90 studies, the average effect of financial education interventions on behavior is a depressing 0.1%. There is a relationship between pre-existing financial knowledge and better decision making, but most financial training interventions did not improve behavior, even if it did temporarily increase knowledge. 

There are numerous explanations of why this might be. According to the study, financial knowledge decays over time such that it has no effect on behavior at about 18 months. This may be in part due to conflicting information from non-experts and biased financial advice from people selling products. Other studies suggest that giving people financial information that is too technical may intimidate them and reduce their confidence, which actually causes worse financial decisions.

On the positive side, there is good evidence that we can improve people’s financial decisions, but the approach must be strategic. If a program is only teaching clients about the power of compound interest, it is unlikely to accomplish anything.

First, focus on cultivating financial soft skills. Some of the best predictors of good financial decisions are basic numeracy, propensity to plan, confidence in ability to research, and willingness to take prudent risk. A course can focus on instilling confidence, making prudent risk seem acceptable, and teaching people how to find reliable financial information rather than merely giving them the information. Keep all the information as simple as possible and action-oriented to ensure you do not intimidate learners with jargon.

Second, create opportunities for immediate application. Financial education is far more effective when delivered just prior to a financial decision. A nonprofit could use a mentoring program to help a client build and enact a budget and save for financial goals. They could use part of the instructional time to help people compare accessible investment opportunities or insurance options and sign up on the spot. Nonprofits can also offer a boost to people moving in the right direction via a program like a matched savings account, food co-op, some additional work opportunities for the under-employed, or access to an interest-free loan to pay off high interest debt. 

Third, build a supportive community. When people are in doubt, they tend to do what they perceive others like themselves are doing. You can leverage this principle, called “social proof,” by using a class structure that allows people to share their achievements and aspirations with others. While studies show this effect is powerful, it can also backfire. If the class is mandated and a significant fraction of the attendees aren’t happy to be there and aren’t planning to apply the knowledge, this effect can be contagious. Additional evidence shows, if the class is mixed-income and the middle-class attendees are sharing goals that would be unattainable by poorer participants, this can also demotivate poorer participants and cause them to save less. 

It is possible to do all three things well, as programs like the Faith and Finances Curriculum demonstrate. One independent assessment showed dramatic improvements in financial behaviors, including emergency funds, budgeting, and conversations about money with loved ones at the end of the course. 

This topic is an important reminder to nonprofit leaders that increasing knowledge is often not enough to inspire change. We must care about the effect of our programs on people’s actions, and we must not cease until we see our activity is generating results. 

 

True Charity Network members have access to detailed reviews of several popular financial curricula available for churches and nonprofits. Network members can click here to view the Curriculum Review Database. Non-members can click here to learn how to get access.

 

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