From Breakfast To A $20 Million Endowment
What can volunteers in the faith community accomplish? Amazingly, they can prompt hundreds of families to move from homelessness to stability.
it started with breakfast
A group of lay leaders had been meeting for breakfast every month to discuss how their congregations could collaborate to address homelessness. Frustrated by overcrowded homeless shelters and neighborhood revolts against constructing affordable housing, the volunteers envisioned a rental subsidy program that would house homeless families by sliding under the “Not-In-My-Back-Yard” radar screen. Families would sign leases in existing apartments scattered throughout the community to avoid the neighborhood NIMBY response to new affordable housing construction. Income generated from an endowment would subsidize the gap between what a family could afford to pay and what a landlord charged for rent. Social services support would help the family address the barriers that led to homelessness and increase their income so that the subsidy could be temporary.
The math worked and the homeless shelter agencies loved it, but how could an idea conceived over eggs and coffee become a reality? The group brainstormed a list of institutions that might be willing to adopt this rental subsidy concept. The first — and only — pitch was made in 2012 to Foundation For The Carolinas (FFTC), the community foundation serving the Charlotte region. By 2014, FFTC had elicited a $10 million, five-year commitment from the City of Charlotte, promising a match with $10 million in private funding, and creating the A Way Home Housing Endowment.
“This is quintessentially Charlotte,” said Michael Marsicano, President and CEO of FFTC, now a $2.5 billion community foundation. “We are better when everyone pulls together -- the faith community, nonprofits, philanthropists, the private sector, and our local government.”
let’s create a pilot
The beauty of an endowment is that the principal generates income year after year, and the endowment itself also grows over time with the market. But endowments sometimes build slowly - especially when donors fulfill their pledges over multiple years - and the spendable income grows even more slowly since it is computed on a 3-year rolling average of the principal.
Unwilling to wait years before starting the program, these early supporters raised an additional $1.2 million to start a pilot with 114 families, aided by Mecklenburg County which offered to fund two social workers. FFTC contributed about half the pilot funding; the Merancas Foundation (a local private foundation) funded a significant portion; and the volunteers raised the balance from their own and other congregations.
Most of the parameters for the pilot were intentionally flexible, allowing agencies receiving funding to experiment with the amount of the rental subsidy and the locations of the leases. However, there were some constraints: families served must earn under 50% of Area Median Income at intake (about $15/hour for a family of three in Charlotte), and the families would be tracked for two years after funding and case worker support ended.
pilot results excel
The pilot outcomes surpassed expectations. Three-out-of-four A Way Home families remained in stable housing with stable income, with no new evictions during and after the two years of support. These families had multiple barriers to housing when they entered the program, often including evictions and bad credit. Many also struggled with undependable childcare and transportation challenges, inhibiting their ability to get and keep a job. Sometimes their path to stability was further complicated by criminal history, health issues, and/or domestic violence. Yet only two years of rental subsidy and social services support moved 75% of these families from homelessness to sustainable stability.
Nearly half of these successful families were able to renew their lease for a third year in their same apartment without subsidies. Children whose families experience homelessness are likely to change schools mid-year, sometimes more than once, yet about 70 children in the pilot spent three consecutive years in their same schools. By remaining in the same neighborhood, the parents also created an opportunity to build support networks for themselves. This stability is critical for creating economic mobility - another community initiative of FFTC.
A Way Home program costs were comparatively low – about $11,000 per family in rental subsidies over an average of 20 months, with the social worker expense of about $5,000 per family covered by the agency or Mecklenburg County. If the family had remained in a homeless shelter for that same time period, the cost to the community would be $33,000 – more than double – and without the positive outcomes.
“tired of living paycheck to paycheck”
Ms. S. and her 14-year old daughter came to Charlotte after they were evicted from their home in Pennsylvania following a job loss. Like many people, Ms. S. saw better job opportunities, housing, and school options for her family in Charlotte.
While receiving an A Way Home subsidy, Ms. S. improved her credit by working two jobs and learning how to budget with the help of her social worker. Before the program, she remarked that she had never thought about only using 30% of her income towards rent and utilities. However, she knew that she was tired of living “paycheck to paycheck,” and needed to make some changes.
She has earned a pay increase of $2/hour plus now commission, allowing her to renew her lease without a subsidy and save money towards her homeownership goal. Her oldest daughter is in her junior year in the same high school where she started as a freshman, and she is on track to graduate early. Ms. S. now also has a month’s rent saved as a cushion for the future.
ramping up
Most of the 114 A Way Home pilot families exited the program by the end of 2018, and 120 new families are moving into housing between 2018-20, subsidized by the now-significant endowment income. The endowment is expected to annually move 100 new families out of shelter and into homes starting in 2021, and every year thereafter. Mecklenburg County plans to increase funding for A Way Home social workers with the growth of the program.
The majority of A Way Home families earn under 30% Area Median Income, where the most urgent need lies for affordable housing in Charlotte — a shortage of 23,600 housing units, worsening from a shortage of 19,500 units the previous year. A shift in community attitudes toward affordable housing led to a record-high $50 million housing bond passing in 2018, amplified by a private funding match also led by FFTC. Yet affordable housing developers build most of their units for 60% AMI or higher, as structural subsidies such as tax credits, below-market interest rates, or free land typically yield a small number of 30% AMI units.
The City of Charlotte has committed to provide access for families with rental subsidies to some of these upcoming 60+% AMI units, which would otherwise be unaffordable. The rental subsidy will enable an A Way Home family to pay the higher rent, and the social work support creates the opportunity for the family to increase their income yet remain in place after exiting the A Way Home program.
a life-changing program
Ms. L. and her children lived in a homeless shelter for six months, and then experienced additional hardships in public housing. This eventually led her to become a resident of a domestic abuse shelter where she and her four children received therapeutic counseling services.
“The A Way Home program was very helpful for me and my children,” she said. “It gave me an opportunity to get on my feet. People don’t realize the amount of time it actually takes to become stable and independent. Starting this program in a new apartment I had nothing. My case manager assisted me with not only getting furniture and beds, but also essential items for the home like pots and pans to cook, and even helped me get food; filling up my refrigerator and pantry.”
“Overall, these two years really motivated me to make the necessary changes to keep going. I learned about community resources, budgeting, and set goals for myself. I currently have $1,700 in my savings account plus one month’s rent for emergencies.”
“This was life changing for both me and my children.”
draft your plan
The Place
o Is there a place with a funding stream that could create an endowment or directly fund rental subsidies? Consider your city, county, United Way, or community foundation, along with the private sector.
o Is there a place with a suitable infrastructure for dispensing grants to agencies and evaluating outcomes?
The People
o Are you targeting affordable housing renters who need special services or those who simply need housing that fits within their budget?
o Consider the mission relevance of low-income seniors, those recently released from prison, LGBTQ young adults, moms with multiple evictions, refugees, people with disabilities, or a specific income level group – all people with barriers to affordable and stable housing.
o Is there a process to connect tenants to services to enable them to increase their income over time?
The Partners
o Are there homeless shelters or other agencies already using rental subsidies to move people from homelessness to homes?
o How will communication channels work between the agencies and the granting organization? Is there a mechanism for sharing best practices?
o Who is responsible for finding willing landlords? How will security deposits be managed?
The Plan
o Who will choose the recipients and using what criteria?
o How will you track clients after support ends?
o Do you need an RFP process to select agencies?
o What resources are available to social workers to help clients increase income, secure reliable childcare and dependable transportation, and cope with mental and physical health issues?
o What caseload are social workers expected to carry?
Judy Seldin-Cohen is board chair for the A Way Home housing endowment. She edits the Faith in Housing blog series and co-authored the recently published book Recharging Judaism: How Civic Engagement Is Good for Synagogues, Jews, & America.
This post is part of a series on Faith in Housing, a workshop for congregations to create affordable housing. “From Breakfast To A $20 Million Endowment” represents an off-site option for congregations with sizable funding accessible for affordable housing.