Nonprofit Homeless Response Staff Struggle to Afford Housing. Will Funders Respond?

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Michael Centeno’s is the kind of personal success story that any funder would be proud to feature in its press materials. Formerly homeless himself, Centeno works as an intensive case manager at Housing Works in Los Angeles, helping housing-insecure people find homes. His passion for, and commitment to, helping others face the same issues he’s struggled with is truly inspirational. 

But despite his impressive work and achievements, Centeno’s pay is so low that he shares a three-bedroom apartment with six other men, a home to which he can’t bring his daughter when she visits him. And while his Housing Works salary comes nowhere near to covering what it would cost to rent his own apartment, when he first took the job, he lost his voucher because he was making $700 a year over the eligibility cut off. Despite taking a pay cut to maintain his eligibility, he has yet to receive another Section 8 voucher.

Centeno’s situation is far from unusual. As a recent RAND report shows, it’s the norm in Los Angeles, where on average, front-line workers like social workers and caseworkers who provide services to housing-insecure people are paid roughly $7,000 to $22,000 less per year than the estimated $64,000 required to maintain a one-bedroom apartment without spending more than 30% of their salary on housing alone. 

The report, “Living Wages in Los Angeles County’s Homeless Response Sector,” was produced in collaboration with Social Justice Partners LA (SJPLA), a community organization dedicated to racial and social equity. It analyzed the estimated average earnings of nonprofit workers in the sector, from front-line employees to leadership, versus what they’d need to earn to avoid being “cost-burdened,” or paying 30% or more of their earnings for an apartment. The data are complex, but the report’s conclusion is simple: L.A.’s front-line homeless response workers aren’t being paid enough to afford a one-bedroom apartment without having to skimp on other necessities.

This isn’t just an L.A. problem. National experts consulted for this article say that the homeless service sector’s workers are critically underpaid nationwide. The result is that, all too frequently, the very workers charged with helping others out of homelessness are at risk of being homeless themselves.

In our previous coverage of the nonprofit worker burnout crisis, we have alluded to the poverty-level wages that result when funders focus solely on outcomes and fail to support the workers tasked with achieving those outcomes. RAND’s report is the second in the past two years proving that those allusions are neither hypothetical nor hyperbole. The numbers are real, and so is the resultant nonprofit hiring crisis. Both raise serious questions for government and philanthropic funders alike. 

The issue goes beyond whether or not funders are willing to pay what it will take to stop high turnover in the sector, and with it, the negative impacts on services for homeless and other at-risk people. There’s also the moral question of whether funders truly value both the people being served and the human beings facing the physical and mental stresses involved in actually fulfilling funders’ missions on the ground.

As National Coalition for the Homeless Executive Director Donald Whitehead put it, “There's a reason why salaries are lower for people providing services for people experiencing homelessness. It's because we don't value [homeless people] as people. And that is clearly apparent.”

Numbers over people

Social Justice Partners LA’s core mission to address racial and social justice spurred it to submit the RFP that led to the RAND study, which was released last month. “We see wages at the center of that, particularly as we look at racial justice in the workplace,” said SJPLA Executive Director Christine Margiotta. “We know that the majority of front-line workers are Black and brown, and that there is a long history of worker exploitation in our country and in the nonprofit sector. So we wanted to first understand what a living wage is in Los Angeles, and then understand the barriers to closing the gap between current wages and a living wage.”

Put simply, the vast majority of the barriers standing between front-line workers and living wages have been put in place, directly or indirectly, by government and private funders. Given the complicated interplay between government and private sector funding for homeless services, it’s hard to say with any certainty who bears most of the responsibility; some nonprofits in the sector rely more heavily on public money while others are more philanthropy-driven. The one thing that is clear is that both government and philanthropy have, even if unwittingly, prioritized numbers over people to the extent that workers and services alike are suffering.

“There aren't as many resources available for infrastructure and maintaining programs; it's more outcomes-based and new-project-driven, versus the day-to-day work that is needed to support people,” Whitehead said. 

Funders’ focus, he went on, is on how many people are being served, not the quality of the service — or the quality of life of the people providing that service. This mindset is particularly troubling given the traumatic nature of the work. Front-line workers “literally have people's lives in their hands, and it creates an incredible amount of stress.” In addition, Whitehead said, about 40% of the workers face additional issues with personal trauma. Being overworked and underpaid “actually exacerbates that trauma, to put it mildly.” 

Workers in the sector are so pressed that when SJPLA offered a $1 million wellness fund for homeless response workers, it received $31.9 million in funding requests from more than 5,000 people in just 13 days. “And these were mostly incredibly modest requests for help with necessities like healthcare and housing,” said SJPLA’s Margiotta during a news conference when the RAND report was released. 

Centeno, the intensive case manager from Housing Works, was another speaker at the press event. In addition to recounting his own struggles, he cited an issue that should light a fire under any funder truly committed to supporting effective services for homeless populations. 

People struggling with housing insecurity frequently have understandable issues with trust. It takes time for case managers and other front-line workers to build a relationship with the individuals they’re tasked with helping. But thanks to extreme underpayment and the job’s other stressors, Centeno said that some program participants end up seeing as many as seven different case managers in a single year. 

Centeno’s experience isn’t unusual. According to Whitehead, there’s a “tremendous” amount of turnover in the sector, mirroring a wider trend of nonprofits cutting services due to a hiring crisis driven in large part by substandard wages. In addition to being underpaid, Whitehead said, workers are also aware of “the hypocrisy of some organizations that will push for a livable wage for the rest of the world and not do it themselves. The realization of that is another factor that causes people to move on.”

New solutions, same as the old solutions

The RAND report’s proposals for addressing the underpayment of front-line workers serving homeless people will sound familiar to IP’s readers, or indeed to anyone who’s been listening to the conversation around philanthropic reform. That is, cover the full cost of services, including cost-of-living wage increases along with funding living wages as a bottom line. Add flexibility to contracts and grants. Reduce administrative requirements and help grantees avoid funding gaps by proactively reaching out to them for renewals.

Most importantly, funders need to change some of their core assumptions. “In my view, there’s often an unspoken mandate that because workers are so driven by the organization’s mission, they will be willing to accept low wages,” said Dr. Elizabeth Bowen, an associate professor of Social Work at the University of Buffalo School of Social Work. 

“There’s a false notion in the nonprofit sector that workers need to choose between caring for themselves and caring for community. There is this ethos that is built into nonprofit work, that workers are not expected to ask for or to expect wages that will enable them to be well in their lives,” Margiotta told me.

Whitehead said he believes funders’ hearts are in the right place and that they are truly committed to ending homelessness. “Unfortunately, there's not as much of a tangible return on the pay you give to workers, as opposed to the number of people you shelter or the number of people receiving case management,” he said — even if those people have had to deal with seven case managers in a single year. 

On the surface, ending chronic underpayment of nonprofit workers may seem like a complex challenge. But in the end, it comes down to a few simple questions: After spending his working day serving others, does Michael Centeno deserve a one-bedroom apartment where he can safely host his little girl? Do people receiving essential services from nonprofits, including people struggling with homelessness, deserve the level of care that can only really come from experienced professionals who can afford to stay in their jobs? 

From what I can tell, funders whose missions include a commitment to ending homelessness or combating racial and economic inequality seem to feel the answer to these questions is a resounding “yes.” With that in mind, we can only hope that more grantmakers will finally stop talking about these issues and take meaningful action.

Correction: The original version of this story misspelled Michael Centeno’s name and incorrectly stated the situation with his Section 8 voucher. We apologize for the errors.