Struggling Homelessness Services Must Look to New Ways of Funding

Homelessness services in Australia are “overwhelmingly” unable to meet client demand and must consider additional funding models in order to ensure their survival, according to a new report.

Research from the Australian Housing and Urban Research Institute (AHURI), released on Friday, has found government funding currently accounts for nearly 85 per cent of funding received by specialist homelessness services.

Yet, around two-thirds of homelessness services indicated they were unable to meet client demand with current funding.

Lead author Professor Paul Flatau, director of the Centre for Social Impact at The University of Western Australia (CSI UWA), told Pro Bono News given the high level of unmet need, it was important that additional funding sources supplement government funding.

“As we would expect, there is a heavy reliance on government funding by homelessness services, and we know that this is considered essential to providing core services. However, with this reliance comes vulnerability to changes in government policy,” Flatau said.

“If we look at ways that the homelessness sector can diversify their funding sources, we can begin to shore up those gaps that exist, particularly in areas that government funding doesn’t reach, such as a coordinated response to address the very high rates of Indigenous homelessness.”

The Inquiry into Funding and Delivery of Programs to Reduce Homelessness was undertaken by CSI UWA, Swinburne University of Technology and the University of New South Wales.

Executive director of AHURI, Dr Ian Winter said it was the first comprehensive Australian evidence of the funding of homelessness services.

“By bringing together a cross-university research team and a panel of expert advisers from the government and housing and homelessness sectors, the inquiry has focused on developing evidence that can practically support policy development,” Winter said

Flatau, who will present the key findings from the report at the AHURI Housing and Homelessness Solutions Conference in Brisbane, said it was important to understand whether homelessness services were meeting demand.

“Homelessness is a very significant problem, a very important social problem and it is also an area where we know those who are experiencing homelessness don’t exactly have the means to pay for the services that may be provided to them,” he said.

“They are in fact the poorest members of society and so we do need to have very strong public support of one kind or another for those services who are providing support to homeless people.

“So that was one reason [for the report], just to understand more about whether we are in fact supporting our homelessness services sufficiently to meet the demand that they face and the point that we make there is, no we’re not.

“We are funding below the level of service required, very particularly in terms of providing accommodation but also in doing the extras such as linking to employment and doing some interesting things, being innovative and so on.”

He said the research wanted to find out if services were diversifying their financial sources.

“I suppose we wanted to know whether they were getting a full range of financing sources or whether they were in fact concentrated around government support and certainly the latter is the case,” he said.

“From an individual service point of view or individual agency point of view that does put services at risk because they have got this one prime source and what we know in the last few years is that there has been a lot of variability and uncertainty in terms of government funding and we’ve got services that suddenly stop because their one or two sources of government funding end.

“From that point of view we are interested in seeing if agencies and services are able to diversify at all. That lead us onto the third thing, so what kind of other sources of funding are we looking at.”

The report found additional revenue sources, including philanthropy, corporate sponsorship, donations and new forms such as social enterprises and social impact bonds (SIBs), were essential to supplement government funding in order to meet demand and implement innovative solutions for housing, co-ordinated support and employment.

It also recommended that more funding was required for capital projects to create a greater supply of accessible, affordable housing to help stem the inflow of people into homelessness, and assist people to exit homelessness.

Flateau said it was important the additional revenue sources supplement rather than replace government funding.

“Our argument is that homelessness is an area where we absolutely need a very strong core government support because those that we are serving are the poorest members of society and have little means by which they can actually pay for their own support,” he said.

“At the same time we want to see the public get more engaged in giving to homelessness and homelessness support services.

“We do see that there are good opportunities of new sources of funding and we’ve seen some interesting stuff around social impact bonds and financing more recently, and more generally with the Common Ground Adelaide example in South Australia in the social impact bond area, but these are relatively isolated examples at the moment.

“We hope that we can see a greater focus on social enterprise financing. Social enterprise financing can have a dual purpose of not only increasing your income and reinvesting it in your support services but also providing opportunity for employment and we are still, in my mind, lagging behind in providing direct employment opportunities for those experiencing homelessness and leaving homelessness.

“We’re also really concerned about innovation in terms of financing… and not just bilateral exchange so that a government grant is provided to a single agency to provide support. Be inventive around something so there is more collaboration, greater partnerships, even national partnerships across jurisdictions and engagement between agencies to achieve a common end.”

The report recommended renewed focus on early intervention strategies to reduce homelessness and cross-sectoral, intergovernmental and cross-departmental government funding packages for integrated service approaches.

“Now we should always have a very strong focus on crisis because this is a point in which people are in the highest need so the idea that we would stop funding crisis and go into prevention and early intervention entirely is ridiculous,” Flatau said.

“But we do need to think about really long term early intervention programs and to support programs that try and stabilise people’s lives early on and this goes to children.

“We have a lot of young children who are homeless, we have young teenagers who are independently homeless, you know 12 to 14 [years old], and we need to intervene very early to stop the cycle of homelessness because half of our adult homeless become homeless before the age of 18.”

He said if homelessness services did not look to other sources of funding the situation could become incredibly risky.

“I think the danger is to the services, that they will be reliant on the positions of government,” he said.

“So it is good when governments are focused on homelessness. We’ve seen state governments do some interesting work recently, Victoria is doing some great work around homelessness… with the Rudd / Gillard initiatives there was money directed towards homelessness but when that period ends you are looking at this very sudden cutback in funding and in many cases, agencies lose all their funding. So it really becomes an incredibly risky situation.”