The Center for the Homeless (the
Center) began operations in South Bend, Indiana in
December 1988. Originally scheduled to open in mid-1989,
the Center started on an emergency basis after a hotel
fire destroyed housing used by may low-income
individuals. The Center was established by four
organizations: (1) the City of South Bend; (2) the South
Bend Junior League; (3) the United Religious Community,
and (4) the University of Notre Dame. Each organization
has representation on the Center's board of directors.
During the
first five years of its existence, the Center evolved
from a disorganized operation responding to an emergency
to one of the nation's leading homeless Centers. The
Center improved its performance by focusing on five
areas: (1) recurring fund drives; (2) establishing
relations with area organizations who contribute goods
and services; (3) developing a group of volunteers who
provide much of the service at the Center; (4)
establishing relations with other not-for-profit
organizations so the Center does not duplicate services,
and (5) improving internal operations, including food and
shelter operations and services to help guests deal with
their problems.
HOMELESSNESS
Many think
that homeless centers may be a cause of homelessness;
that is, if there are beds available, people will become
homeless. But the facts suggest that there are more
homeless people because their former residences were
eliminated. The government also significantly reduced
funding for public housing from 1980 to 1987. That
reduced both the number and the quality of low-income
housing units. The U.S. Census Bureau estimates that
currently there are 15,000-20,000 homeless shelters in
the U.S.
Though founded
on good intentions, this shelter industry has potentially
done more harm than good for the homeless. Many of these
homeless shelters operate as human warehouses in several
cities. These shelters provide food and lodging to
individuals without providing them with opportunities to
overcome the desperate conditions that are the root
causes of their homelessness. What is worse, many
facilities are dirty and overcrowded. Since many of these
shelters are dangerous places, quite a few single mothers
move their families into even more dangerous forms of
marginal housing. While many facilities brush the basic
problems under the carpet, few offer any lasting
rehabilitation.
One
institution which offers long-term benefits is the Center
for the Homeless Inc. in South Bend which also provides
three hot meals a day, a bed and a clean and safe
environment in which to reside. The Center provides
comprehensive and integrated services to address the full
range of needs of the guests in an effort to restore them
to self-sufficiency. The Center receives strong community
support not only from South Bend, but also from the
surrounding area, including Southwest Michigan.
FINANCIAL
CONDITION
The Center
operated at a deficit since its inception in 1988 through
November 1993. At the end of 1992, the Center was
$100,000 in debt to the University of Notre Dame. By the
end of December 1993, the Center had fully paid back the
debt, and had a cash balance of $80,000. The healthy
financial position of the Center can be seen from the
audited financial statements. A statement of the Center's
assets, liabilities, and fund balance is given in Exhibit
1; and
revenues, expenses, and changes in fund balance in Exhibit
2.
The Center
improved its financial health primarily through
fund-raising. Three recurring activities contribute
significantly to cash inflows: an auction in February, a
golf outing each spring, and a Christmas luncheon. The
resources are further augmented by the contributions of
private donors and corporate sponsors. The Center
generates about 80 percent of its revenues from the
private sector.
The Center
operates with an annual budget of about $1.8 million for
the fiscal year l995 (the Center has changed its fiscal
year ending to June 30 from December 31). Exhibit 3
illustrates a recent budget which shows the various
sources of cash donations and the in-kind revenues, such
as food donations, the building donated by Notre Dame,
volunteer hours, donated professional services such as
external auditing, carpet cleaning, waste pick up, etc.
(see Panel A). In-kind revenues account for
about $800,000. Panel B provides a breakdown of
various expenses.
The Center
also receives services from various partner agencies,
such as area schools, health services, social security
department, local hospitals, etc. These services, in the
year 1995, were valued at about $1 million. While the
Center does not directly control this budget, the
Center's operation depends critically on this important
collaboration.
A SNAPSHOT
OF SERVICES PROVIDED
The Center
provides two program formats for homeless adults and
families seeking support. The first program is the
Continuum of Care Program that includes structured
classes and job training opportunities designed to help
the guests move beyond homelessness and into employment
and permanent housing. This long-term self-development
and education program is designed to help guests who are
committed to a self-sufficiency plan. The Center has
implemented a model of continuum of care program (see Exhibit
4 for
details) which has received bipartisan support in our
nation's capital as an example worthy of replication
elsewhere. Under the Continuum of Care approach, many
communities can develop seamless homeless systems to
assist individuals and families in achieving independent
living. The model adopted in the Center has the following
six phases:
1. Crisis
intervention, assessment and primary treatment
2. Personal
development and education
3. Job
training and placement
4. Job
retention
5. Supportive
housing
6. Home
ownership
The second
program is the Emergency Services Program. If a guest
chooses this program, he/she will be provided 30 days of
shelter services; which includes a hot shower at evening
check-in, a bed for the night and breakfast in the
morning. Such a guest is issued an orange-colored name
card, and is required to leave the building at 8:00 a.m.
and return at 8:00 p.m. each day.
The Center has
a set of basic rules designed to promote personal
responsibility, maintain a sense of respect and
consideration among guests, staff and volunteers, and
provide a secure environment for all to better
themselves.
ORGANIZATION:
The Center's
operations are directed by the Board of Directors. The
Board is supported externally by a Council of Advisors,
which meets at the Center once every three months. The
Center is organized into seven departments, as shown in
the organization structure (see Exhibit
5).
MS. TAMMY
OEHM, DIRECTOR OF ADMINISTRATION SERVICES
Ms. Oehm began
working at the Center six months after it opened. She is
responsible for administration services, and reports to
Lou Nanni.
Casewriter:
How do you keep the Center safe? We understand that most
homeless Centers are dangerous.
Ms. Oehm:
That's correct. When I started here I went home by 4:00
p.m. each day. I was afraid to stay later when it grew
dark. I also did not work on the weekends. The residents
in effect ran the Center. There was liquor; there were
knives and guns. Over the years we have instituted a
number of procedures to make the Center safe. More
important, we now have funds to hire off-duty South Bend
police officers. They work as security guards in the
evening on weekends. They carry guns and have arrest
powers. Safety and security are the first two conditions
that we need to ensure for every guest. Furthermore, we
treat guests with respect, and, in most cases, are
treated similarly in return.
Casewriter:
You have very strict policies against alcohol and drugs?
Ms. Oehm:
we do. If someone comes into the Center intoxicated (we
test them with a Breathalyzer>), we turn them away. If
they have any place else to stay, we ask them to go
there. If there is no transportation, in rare cases we
pay the cab fare. If they have no place, and it's winter,
we have them arrested for their own safety. We don't want
anyone freezing to death. The same is true for drug use.
When guests check into the Center they agree to submit to
a drug-testing policy which is carried out on a random
basis. It's a touch policy, but substance abusers can
make life dangerous for everyone, and they must be called
on their addictions if they are going to seek treatment
and find recovery.
Casewriter:
What if someone is trying to kick a drug or alcohol
addiction? Do your caseworkers counsel on substance
abuse?
Ms. Oehm:
Yes, but we refer persons with chemical dependencies and
addictions to Madison Center & Hospital's drug and
alcohol rehabilitation program. It is a three-month-long
intensive outpatient program which meets for six hours
per day, five days per week. It also treats those who are
dually diagnosed with a chemical dependency and mental
illness.
Madison Center
& Hospital also offers on-site counseling and support
services for persons with mental illnesses through a
drop-in clinic with four professional counselors at the
Center. The great thing about our relationship with
Madison Center & Hospital, and with every other
not-for-profit organization in South Bend, is that we try
not to duplicate services. A major advantage of being in
a relatively smaller community like South Bend is that we
work together to make sure that the people are helped in
the most effective manner.
If someone
needs medical or dental care, we work closely with
Indiana Health Centers; they maintain a medical clinic at
the Center. If an individual needs educational services,
we offer GED (high school equivalency) and literacy
courses on site. If children are of school age, we work
with the South Bend Community Schools to see that they
are registered the day they arrive and that their
teachers are notified. A two-hour after school tutoring
program is then run by volunteers at the Center. If
someone needs job training, we work with Workforce
Development Services, a state agency that runs a
specially designed program for the Center called NOVA,
which helps guests find a job, buys them eyeglasses if
they need them to perform their work, and helps them get
an education. It really is a community effort; we provide
food and shelter services counseling, and much more
through partnerships with different community agencies.
Casewriter:
we would like to ask you about community support; in-kind
donations of goods, food, services and volunteer time.
How has that helped you plan your operations?
Ms. Oehm:
Support from the community gets better each year. I think
that distinguishes us from most homeless shelters. The
supermarkets, local meat processors, bakeries and the
farmers' market give us fresh food, and in the summer
many area farmers give us huge quantities of fresh fruits
and vegetables. Notre Dame students volunteer in a food
sharing program that brings leftover food from the dining
halls to the Center every evening. The best thing about
the food is that the contributions are plentiful and
regular.
Another big
help is the "shoe box" program with local
school groups, Girl and Boy Scout troops, church groups,
and others. These groups ask each girl, boy, or family to
contribute a shoe box filled with toiletries. When a
guest checks in, we provide them with a shoe box. For a
man, it includes a toothbrush, toothpaste, soap, shampoo,
shaving cream, a razor with blades, new underwear and
socks, and other items. We also have shoe boxes for
women, girls, and boys. If a family checks in, we have a
box for the mother and the father, and for each child.
We have many
volunteers who work five, ten, and sometimes forty hours
per week. Our volunteers are talented and committed
persons dedicated to improving the quality of life for
all the guests at the Center. About 3,000 volunteers
serve about 17,000 hours of volunteer work annually; and
provide services in many areas ranging from accounting to
zoo trips. In addition to unpaid volunteers, 18 interns,
sponsored by the University of Notre Dame, augment staff
capabilities each year, logging over 2,100 hours of work
in case management, development and guest services.
Two of the
area hospitals offer laundry services weekly for the
linens used in the Center and the City Parks Department
arranges for the transport of linens to and from the
hospitals. Other examples of community support include
free carpet cleaning, waste pick-up, a $25,000 van leased
to us for free, bank personnel designing software for our
record keeping and management information systems,
service learning projects with university students and
the like.
Our largest
single contribution is the building. The University of
Notre Dame owns it, but only charges $1 per year for
rent. We've shown the rent as equivalent to $200,000 per
year; this year it will increase to $250,000 because
Notre Dame has substantially improved the facility.
Casewriter:
You have a wide range of programs to assist the homeless
in improving their situation. Do you also serve those who
simply want food and shelter?
Ms. Oehm:
Each guest is given a name card. An orange name card
means the guest is not working toward self-improvement;
the person is not interested in a job, in treatment, or
an education. Guests simply opting for Emergency Services
with overnight shelter and meals receive an orange
colored name card. They must leave the building between
8:00 a.m. and 8:00 p.m. We let them sleep here and they
are given breakfast and two sack meals, but they are not
allowed in the first-floor lounge or waiting room during
the day. They can remain at the Center for a maximum of
30 days on this status. During this time we will work
with them to make a transition toward our
self-sufficiency program.
Guests working
to improve their situation are given a blue name card.
They are working, seeking work in treatment, or attending
educational programs. We require that they save 75% of
their income, whether it is from a job or from Social
Security. The savings prepare them leave the Center in a
better condition than when they arrived. In the past we
encouraged guests to leave as soon as possible; now we
encourage them to stay until they have a reasonable
chance at living in permanent housing. Guests with blue
name cards can eat lunch and dinner at the Center, and
can stay in the lounge or waiting room during the day.
However, most are busy working at a job, or involved in a
treatment or educational program in the Continuum of
Care.
New guests are
issued a yellow name card on arrival. The yellow name
card expires within three working days, during which time
the guest should meet with the case manager assigned.
Otherwise, the guest is automatically transferred to
orange name card status (Emergency Services). A green
name card is for those Center guests receiving direct
case management services from Madison Center &
Hospital for mental illness. They receive daily meals,
and may remain in the building during non-program hours,
including weekends.
Casewriter:
Are most of the guests who seek work able to find
employment?
Ms. Oehm:
Yes, but unfortunately, many get minimum-wage jobs at 30
hours a week or less when left to their own efforts. That
may be enough for a single person after they've saved
enough for a rent deposit, but not for a family. That is
particularly true for single mothers who can't afford day
care or health insurance. Guests who gain employment
through our Continuum of Care program, however, earn an
average starting salary of $7.00 per hour with supportive
employers. So it pays to stick with the Center programs
in the long run.
Casewriter:
How do you measure performance; to determine whether
services are improving?
Ms. Oehm:
We have the following mission statement.
"The
Center for the Homeless provides a hospitable environment
where men, women, and children can find respect and
dignity, as well as comprehensive services integrated to
assist them in overcoming their condition of
hopelessness. Through widespread community support,
especially volunteerism, the Center brings together
disparate groups in our society so that each can discover
the dignity, worth and God-given potential of the other.
The Center's goal is to assist each individual and family
to achieve self-sufficiency, which involves possessing
the knowledge and skills to secure decent housing, to
sustain a healthy lifestyle and to establish the
life-giving relationships necessary for personal
stability and growth."
We try to
measure ourselves against the mission statement, but that
is difficult. The problem is that our guests are so
different. For some, success is finding a job, getting a
home, and leaving the Center. For others it's staying
sober for three months which may be something they
haven't done in ten years. We're serving more guests, and
feel we're doing a better job of helping them, but we
really don't have a system to measure our performance,
other than number of guests served and a few other
summary measures (Exhibit 6). We are working to
improve in the area of measurement criteria and
performance appraisal. Recently, we have started tracking
the progress of guests enrolled in each of the 6 phases
of the Continuum of Care program and periodically compute
attrition rates. We are encouraged with some of our
preliminary successes. For example, just since June 1995,
over 40 people in this program are employed, 15 are in
supportive housing and one individual and one family have
achieved home ownership.
Future
Challenges
As the Center
continues to improve, it faces challenges associated with
growth. Collaboration with the partner agencies is
critical to the operation of the Center. The challenge
lies in continuing to keep these agencies motivated in
supporting the Center, especially when severe cutbacks in
federal funding appear imminent. The Continuum of Care
Program calls for teamwork and innovative methods of
communication. Given the growth in the number of guests
and the partners, there is an additional challenge of
staying rooted in the original mission of providing
quality care. The Center also faces the challenge of
managing its public image.
The Center is
attracting greater attention from public figures such as
the Secretary of Housing and Urban Development, Henry
Cisneros (see Exhibit 7), U.S. Senator Dan Coates,
and the Mayor of Indianapolis Steve Goldsmith. Based on
some of this exposure, a National Training Center for
Homeless Providers is in its nascent stages of
establishment. The training center, when established,
will permit the South Bend Center to share with other
communities the many insights gained from developing a
continuum of care approach. This may help others to learn
from the Center's model and assist them in implementing
more effective programs for homeless persons across the
nation.
Issues for
discussion and written assignments:
1. Discuss the
Center's organization. How is it organized? What are the
resource flows? Who provides the inflow of resources? Who
are the beneficiaries of the services provided?
2. What are
the primary objectives of the Center? Distinguish between
social and corporate objectives.
3. Compare
briefly the services offered at the Center to those
offered by many large city homeless shelters. What do you
think of the Center turning away guests in the interest
of a safe environment?
4. What would
you do to improve the Center?
5. Exhibit
6 shows
some key operating measures. How would you use these to
measure the Center's success? Can you describe other ways
to measure the Center's success?
6. Using the
assumptions in Exhibit 8, prepare a statement of
budgeted quarterly cash-flows to show whether the Center
will have adequate cash reserves during 1996.
7. Suppose
that in fiscal 1996 the Center expects to generate
$200,000 less cash inflow than shown in Exhibit
3. Where
would you reduce expenses?
8. Suppose the
Center had $200,000 more cash inflow than anticipated.
How would you use the funds?
9. What
contributes to the Center's success?
10. How would
you improve an unsafe center in another city?
11. Suppose
you were a member of Congress. How would you propose to
improve the quality of the nation's homeless facilities?
Copyright 1996
by the American Institute of Certified Public Accountants
(AICPA). Cases developed and distributed under the AICPA
Case Development Program are intended for use in higher
education for instructional purposes only, and are not
for application in practice. Permission is granted to
photocopy any case(s) for classroom teaching purposes
only. All other rights are reserved. The AICPA neither
approves nor endorses this case or any solution provided
herewith or subsequently developed.
|