Alternative funding unlikely to reduce homelessness

New AHURI research finds that although Specialist Homeless Services (SHS) agencies do receive some funding from diverse non-government sources, these are unlikely to provide a significant contribution to reducing homelessness in the foreseeable future. This is because the funds raised are relatively small and are used to supplement/complement mainstream services. Importantly, raising the funds requires the allocation of resources such that the additional administrative and accountability costs and managing multiple sources of funding has real costs for SHS agencies, which in turn affects the delivery of their services.

The report, ‘The funding and delivery of programs to reduce homelessness: the case study evidence’, undertaken for AHURI by researchers from Swinburne University of Technology, the University of Western Australia and the University of New South Wales, also reveals that investment by SHS agencies in early intervention and in breaking the cycle of homelessness are associated with cost savings over time but that these two strategic policy areas remain under-developed. Associate Professor David MacKenzie, from Swinburne University of Technology is the research’s lead author. ‘Our research focused on nine case studies that used different service models, organisational forms and potential new ways of funding services for the homeless such as rent from other properties held by the organisation, philanthropy, corporate sponsorship and donations,’ says David.

The report’s findings serve as somewhat of a ‘reality check’, identifying some promising possibilities but also signalling the limitations of alternative sources of funding for the delivery of homelessness services.

‘We also investigated new forms of non-government funding such as social enterprises and social impact bonds. Typically, social enterprises underwrite ancillary or additional support services, and although a few have been developed by agencies, they can struggle. It is unlikely that many homelessness agencies are in a position to develop financially successful social enterprises.’

‘There are a number of trials underway throughout the world of social impact bonds, which promote a business investment model for obtaining private capital investment. Our research shows that, to be effective, agencies must work out what is most appropriate for this kind of funding, what its limits are and how the outcomes can be measured.’

‘The report’s findings serve as somewhat of a ‘reality check’, identifying some promising possibilities but also signalling the limitations of alternative sources of funding for the delivery of homelessness services.’