Getting to Work on Homelessness
(Client: Skid Row Housing Trust)
Getting to Work on Homelessness
OP-ED: An L.A. task force applies business principles and draws up an action plan to tackle a
chronic civil problem.
By RENEE WHITE FRASER and JERRY NEUMAN 11/15/10
Why would 22 successful business leaders spend more than a year evaluating homelessness in greater Los Angeles?
Because when it comes to homelessness, it is long past time to take care of business.
The Los Angeles Business Leaders Task Force on Homelessness was created in 2009 by the Los Angeles Area Chamber of Commerce and United Way of Greater Los Angeles. Composed of executives from fields as diverse as real estate, logistics, communications, security, law and finance, the group has done what executives facing a challenge always do – develop an accurate status report, evaluate resources, conduct a cost analysis and chart an action plan.
The task force walked Skid Row and met with successful supportive housing developers and the once-homeless residents the developers’ housing supports. We learned that New York had an effective approach to locating and housing chronic homeless folks, so we invited the organization that built that program to enlighten us.
We recognized that funding for homeless programs flows in great measure through Washington, D.C., so we dispatched a delegation to meet with federal officials and visit with the L.A. congressional caucus. We learned that Denver has a successful campaign to end chronic homelessness and went there to examine what they did and how, meeting with political experts, housing providers, police and executives who created a jobs program for formerly homeless individuals.
The task force audited finances and what we found staggered us: In greater Los Angeles, we spend at least $875 million on homelessness every year. Our chronically homeless constitute only 25 percent of our homeless population yet, for good reasons, they consume up to 74 percent of the total we spend. Chronically homeless individuals rely on ultra-expensive emergency room health care, consume significant mental health resources because they are often mentally disabled or addicted or both, and rely heavily on our hodgepodge network of case management, nongovernment agencies and non-profits.
Our cost-benefit analysis is as stunning as the raw numbers. Our annual investment is enormous, the return on it negligible. Our region remains the homeless capital of the nation, and our population of chronic and veteran homeless remains essentially constant. We manage our homeless population, but we do not appreciably reduce it. We generate precious little return on investment.
Once we had reliable data on the current state of affairs, the task force took the next step. We evaluated best practices, worked the data, explored the options, calculated the costs and amortized them over a carefully planned realistic calendar. Once we had a solid framework, we shared our plan to those who will work with it – government leaders and the agencies they supervise, social serviceagencies, business leaders, law enforcement – to incorporate their input.
Home for Good
We came to a conclusion as solid as it is remarkable: We can end chronic and veteran homelessness in greater Los Angeles in five years and spend less than we do now. We project a net cost avoidance of at least 40 percent over five years when our recommendations are implemented. (The task force’s report, Home for Good, is available at homeforgoodla.org.)
This will not be easy. We don’t gather data about homeless individuals well and we don’t use what we gather effectively. We need to focus our resources on specific outcomes and we need to measure progress frequently and rigorously. We must rely on permanent supportive housing to a far greater extent than we do now. We must create an efficient housing system for chronic and veteran homeless (at least 50 percent of the housing stock we need already exists, we just don’t use it wisely).
The task force will not be content to submit our work and see it shelved. Instead, we’re going to stay on the job until the job is done. Our plan will benefit the community in which we live and work, so we won’t go away – we will take care of business.
Why are 22 successful business leaders willing to tackle a seemingly insurmountable problem? Because the diminution of our community and its inhabitants must end, because this problem is not insurmountable and, in fact, will be solved, because taking care of our neighbors is our social responsibility. Because we hope you wilsee it as yours.
Renee White Fraser, Ph.D., is the chief executive of Fraser Communications in Los Angeles. Jerry Neuman is a partner in the law firm Sheppard Mullin in Los Angeles. They co-chair the Los Angeles Business Leaders Task Force on Homelessness.
Home for Good
WHPR Partner David Hamlin was instrumental in gaining this front page LA Times Extra story and editorial.
Read more
Program Seeks to Aid Hard-Core Homeless
(Client: Skid Row Housing Trust)
Plan drafted by a civic task force hopes to slash costs by getting the chronically homeless into housing. But Supervisor Antonovich calls the controversial approach ‘warehousing without healing.’
By Alexandra Zavis, Times Staff Writer 11/09/10
Prominent business leaders are putting their weight behind a plan that they say could make a major dent in homelessness in Los Angeles County, embracing a strategy that will face significant political opposition.
The blueprint they plan to unveil Tuesday seeks to put a permanent roof over the heads of the most entrenched street dwellers, then provide them as much counseling and treatment as they will use.
Because the chronically homeless take up a disproportionate share of resources, the plan’s authors argue that focusing on housing them will ultimately free up services for the many more people who need only temporary help to get back on their feet.
“For too long, Los Angeles County has been the homeless capital of the nation,” Jerry Neuman and Renee White Fraser, co-chairs of the Los Angeles Business Leaders Task Force on Homelessness, wrote in an introductory letter. “It need not be this way.”
Representatives of 22 organizations — including JP Morgan Chase, NBC Universal and Caltech — formed the task force in September 2009 after United Way of Greater L.A. approached the Los Angeles Chamber of Commerce about engaging business leaders to find solutions to homelessness.
The task force spent 10 months meeting with local and national experts and visiting programs that have reduced homelessness in cities such as Denver and Santa Monica.
The key, task force members say, will be getting dozens of local institutions unified on the project. The group is asking county and city authorities, social service organizations, law enforcement agencies and faith-based groups to sign on to a detailed plan they call “Home for Good” by Dec. 1.
Los Angeles County Supervisor Zev Yaroslavsky, who initiated a pilot version of the housing-first strategy known as Project 50, said he gave the plan high marks.
“It is ambitious. It is doable,” he said. “I hope the Board of Supervisors will endorse the plan.”
But the approach is controversial. Most chronically homeless people have serious physical, mental or substance abuse problems. Supervisor Michael D. Antonovich has complained about spending tax dollars to provide housing to individuals who continue to abuse drugs and avoid treatment, calling the approach “warehousing without healing.”
“The supervisor won’t agree to any plan to deal with homelessness that does not have mandatory mental health and substance abuse treatment as a component,” said Antonovich’s spokesman, Tony Bell.
Neuman, a partner at Sheppard Mullin Richter & Hampton LLP, said local authorities spend $650 million a year on the chronically homeless, who are heavy users of hospital emergency rooms, jail cells and other crisis services. The figure accounts for about three-quarters of annual spending on homeless services, although the chronically homeless make up only a quarter of 48,000 or more people sleeping on the streets, in cars and in shelters on any given night in Los Angeles County.
“What we found is that if you can take those people into permanent supportive housing, you can save about 40% of those dollars,” Neuman said, citing two local studies.
Neuman, a partner at Sheppard Mullin Richter & Hampton LLP, said local authorities spend $650 million a year on the chronically homeless, who are heavy users of hospital emergency rooms, jail cells and other crisis services. The figure accounts for about three-quarters of annual spending on homeless services, although the chronically homeless make up only a quarter of 48,000 or more people sleeping on the streets, in cars and in shelters on any given night in Los Angeles County.
“What we found is that if you can take those people into permanent supportive housing, you can save about 40% of those dollars,” Neuman said, citing two local studies.
Proponents of the housing-first approach argue that people are more likely to stick to treatment regimens when they don’t have to worry about where they will be sleeping. And if they relapse, social workers know where to find them.
When Project 50 staff found 63-year-old George Givens on the streets of skid row, he had untreated schizophrenia. But since moving into a downtown studio apartment, he collects his medicine every morning from a nurse practitioner who works in the next building.
It took the staff more than two years to persuade Givens to come in off the streets, where he had survived for a decade by collecting cans, cardboard and bottles to recycle. He said others who offered to help him had let him down. But he said he does not miss “being out in the rain and the cold and the pickpockets.”
The county program, which initially targeted the 50 people most likely to die on the streets of skid row, has housed 107 people since January 2008. Of the 68 housed in the first two years, 51 remain in the program, seven died, four were incarcerated and six dropped out.
By reallocating an average of $230 million in existing resources each year, the task force argues that by 2015, it would be possible to house all of the estimated 12,000 people who have been living on county streets for more than a year. Half would be accommodated in existing units of supportive housing, which turn over at a rate of 15% to 20% a year. The rest would be provided through new construction, rehabilitation of existing buildings and the creation of mobile teams to provide services to scattered sites.
An additional 6,000 newly homeless veterans could also be housed, using resources from the U.S. Department of Veterans Affairs, according to the task force.
Helen Berberian, Antonovich’s social services deputy, questioned whether it was fair to set aside housing subsidies for the chronically homeless, when other vulnerable people had been waiting years for them.
“The sad thing is that we just don’t have enough housing resources, period,” she said.
The plan also relies on communities to share not only data collected on their homeless populations but also the burden of housing the county’s homeless.
“I think NIMBYism is one of the greatest issues we are going to be tackling,” Neuman said. “But the reality is we can create a system which has a safety net for all those people and ends chronic homelessness, so nobody has to be on the streets for a year or longer.”
Solving Homelessness Will Require Cooperation
(Client: Skid Row Housing Trust)
Los Angeles County has seen a revolving door of ideas, initiatives and proposals. The real solution will be the one that gets the myriad government agencies, nonprofits and service providers to march in lock step.
November 09, 2010
Los Angeles remains the nation’s homelessness capital, with almost 48,000 people living around the county on streets, in cars and in shelters, according to the Los Angeles Homeless Service Authority. About a fourth of them are chronically homeless, burdened in many cases by physical and mental ailments that make it hard for them to reintegrate into society.
The magnitude and intractability of the problem haven’t stopped policymakers and homeless advocates from offering plan after plan for improving the situation, but none has made much of a dent in the homeless population. On Tuesday, yet another group will weigh in: the Business Leaders Task Force on Homelessness, a project organized by the local branches of the Chamber of Commerce and the United Way. There is much to recommend in the plan and we wish the group well. But unless the task force draws the unflinching support of government, service providers and volunteer groups, its plan will probably suffer the same fate as the many that came before it.
The task force’s goal is to end homelessness in the county, not just manage it. To do so, it proposes a rapid increase in permanent supportive housing over five years. Such housing, which offers ready access to treatment, training and counseling, would be provided for all of the county’s chronically homeless and homeless veterans.
It’s ambitious, yet the plan isn’t new or radical. Instead, it reflects an emerging consensus around the country that getting the homeless into permanent housing should be the top priority. It also aligns with the county’s Project 50 initiative and the Obama administration’s stated goal of getting all veterans and chronically homeless off the streets. And the biggest selling point, some advocates say, is that these efforts save money in the long term because they reduce the amount spent on shelters, emergency rooms, jails and other crisis services.
The most obvious challenge will be freeing about $230 million annually to provide permanent supportive housing for all the chronically homeless over the next five years. Just as big a hurdle, though, could be the lack of coordination among the many layers of government and the private and nonprofit service providers that play a role in combating homelessness. Cooperation has been improving, yet the task force will still have to sell its plan to multiple factions that don’t always see eye to eye on the nature of the problem, let alone the solution. Here’s hoping that the clarity and ambition provided by the plan doesn’t get lost in the struggle to implement it.
Hot Tunes, Smooth Dancing, Nearby Fries
(Client: Farmers Market)
Lucky Stars in Concert
There’s always good and bad with finding that perfect place to dance or simply listen to tunes.
A spot might be too cramped. It might not serve food. The cover charge might be seriously steep.
But then there’s the Original Farmers Market, the one at Third and Fairfax, the one that your grandmama shopped at and you probably do, too. They’ve got the best dancing sitch in the city come summer time, courtesy of the famous Summer Music Series.
The 2010 Summer Music Series opens on Thursday, May 27, and happens every Thursday and Friday through Friday, September 10.
So, let’s mark it off. The dancing is outside (okay, it can get tight, but only because so many people are having a good time; you can make your own space to swing, promise, even if it is off in a corner). Food is served nearby, of course. The best food, and the best variety. Chili fries and Korean barbecue and dark ales to boot.
And there is no cover charge.
Check out the bands (pdf). Big Sandy & His Fly-Rite Boys on September 3! We are saddle-shoe-ing up now in anticipation.
ABC News: Introducing the New Bachelorette
(Client: Farmers Market)
Watch the video on ABC news: http://abcnews.go.com/GMA/Entertainment/video/introducing-bachelorette-10727828
Manage Your Cash Flow to Get Credit
(Client: Credit Management Association)
When the economy started its downward slide, Debra Parcheta, chief executive officer of software-development firm Blue Marble Enterprises, immediately saw the effects in the form of slower receivables.
“At that time, customers didn’t care about our 30-day terms. They started stretching their payments out to 60 or 70 days,” she says. “But my fixed expenses didn’t go away. I still had to pay my employees, payroll taxes, and everything else.”
Fortunately the company had secured a $100,000 bank line of credit before the slowdown hit. “We tapped our line for about $30,000 to help get us through this period and paid it back within a year,” she says.
Parcheta’s story illustrates the importance of building and maintaining strong business credit. At some point, most growing companies will need to access credit. Whether it’s to plug short-term cash-flow gaps (as in Parcheta’s case) or to finance expansion, new equipment, or more employees, few companies have the resources to grow on their own without some kind of cash infusion.
“Small-business borrowers have traditionally relied on credit cards and home equity lines of credit to finance growth,” says John Barrickman, the president of New Horizons Financial Group, a financial consulting firm. “However, these avenues are now closed for many small firms.”
Unfortunately many business owners make the mistake of not thinking about how to prepare their companies for the day they’ll need to borrow money — until the day they need to borrow money. “It’s always better to engage a lender sooner rather than later,” says Phil Wambles, a senior vice president and senior credit officer with Regions Financial. “The earlier you bring your banker into the process, the more flexibility he or she will have to help meet your needs.”
Of course, the current credit environment doesn’t make things any easier. Since the onset of the financial crisis, most banks have tightened their lending standards considerably, making it hard for even some well-established businesses to obtain loans. This makes it critical to begin planning now for the day when you may need to borrow money for your business — whether it’s three months or three years from now.
Barrickman says companies should do everything they can to position themselves as an attractive financial risk to banks and other lenders.
Specifically, banks are looking carefully at the traditional “five Cs of credit”: character, capacity, collateral, capital, and market conditions. “Business owners should look carefully at their companies to see how they’re doing in each of these areas before talking to a bank or lender about getting a loan,” says Barrickman.
In today’s environment, capacity is especially important, he adds. “There’s no substitute for strong cash flow. Lenders will look for patterns to help them see what is driving cash flow and how stable a borrower’s cash flow might be.”
“Cash is king,” says Parcheta. “I don’t think of myself as being in the software business, I’m in the cash flow business. We manage the company to our cash flow. When it comes to business purchases, if I don’t have the money in the bank, I’m probably not going to buy it.”
Hector Jimenez, a vice president with G&M Mattress & Foam Corp., which is a member of the Credit Management Association, says his company has implemented three strategies to boost credit.
First, we’re paying all of our bills on time so we remain as attractive a customer as possible for banks. Second, we’re doing as good a job as we can in collecting from our customers who buy from us on trade credit. And third, we’re only buying on credit now if we absolutely have to. We’re also sticking closer to our credit agreements with customers so that when business does pick up we’ll be able to purchase what we need without a problem.”
To qualify for a loan, Wambles says a business should meet three basic criteria: “It should have good credit, manageable debt, and solid cash flow.”
To keep her company’s credit rating high, Parcheta tries to use the credit she has wisely, paying off corporate credit cards every month and paying down her credit line in a timely manner. “We use our credit responsibly,” she says. “I know other businesses that got into debt and thought they could work their way out of it by growing sales, but this is a tough environment in which to get new customers.”
Wambles says now is the time to give your company a once-over and make sure it looks presentable to lenders. “Dust off your business plan and make sure it’s adjusted to reflect the realities of your business today and what you expect tomorrow. Also have updated financials and cash flow statements at the ready and be prepared to discuss how the loan amount you’re requesting will be used and how it fits into your overall plan.”
The good news is that, despite the credit crunch, there are still lenders out there who want to loan money to financially sound businesses with strong management and track records. “Banks are absolutely still in the lending business,” says Wambles. “Funds are still available for qualified borrowers — the key word being qualified.”
Also remember that in today’s credit environment, communication with your banker is more important than ever. Bankers don’t like surprises; so let your lender know about everything that’s going on with your business. “Being proactive when sharing news, whether good or bad, with your banker builds the banker’s confidence that you truly understand your business and are doing a good job of monitoring its financial performance,” says Barrickman.
“Whether the news is good or bad, both parties are impacted,” says Wambles. “Ultimately, it’s in the best interest of all involved that the business prospers.”
Don Sadler is a freelance writer specializing in business and finance. Reach him at don@donsadlerwriter.com.
L.A. Study Finds ‘Bang for the Buck’
(Client: National Committee for Responsive Philanthropy)
A new study of Los Angeles County nonprofit groups concludes that spending on advocacy and local organizing can yield significant returns for the people and neighborhoods the organizations aim to serve, the Los Angeles Times reports.
Every dollar spent by advocacy groups in the study produced $91 in benefits to local residents, according to the National Committee for Responsive Philanthropy, in Washington.
The watchdog group said the $75.5-million spent on advocacy by 15 groups promoting causes such as school construction and increases in the minimum wage generated nearly $6.89-billion in benefits, well above “the kind of bang for the buck that you get when you invest in funding direct services,” said Aaron Dorfman, the center’s executive director.
Getting More Back from Giving
(Client: National Committee for Responsive Philanthropy)
Most charitable giving goes to programs that provide a service rather than try to fix the system. But a study of Los Angeles County nonprofits found that spending on advocacy and organizing can yield major benefits for the communities that donors want to help.
The National Committee for Responsive Philanthropy estimated that for every dollar invested in the work of a selection of advocacy groups, there was $91 in benefits to local residents.
“It is far . . . above the kind of bang for the buck that you get when you invest in funding direct services,” said Aaron Dorfman, executive director of the Washington-based philanthropy watchdog.
Dorfman said he hoped the report released Tuesday would encourage foundations to consider investing at least 25% of their grant dollars in advocacy, organizing and civic engagement.
From 2004 to 2008, the committee collected and verified data from 15 groups engaged in fighting poverty, improving health and education, defending minorities and other causes. It found that the $75.5 million spent by the groups on this kind of work generated nearly $6.89 billion in benefits to residents.
The report’s authors acknowledge shortcomings in their attempt to put a dollar value on advocacy work. The groups studied were often part of coalitions that also contributed funds; policymakers don’t base their decisions only on what nonprofits tell them; and not all the results can be quantified.
But independent analysts said the report showed there were tangible benefits to supporting advocacy groups.
“These are the organizations that are working to make sure that money is going to people in need and that it is benefiting their communities,” said Elizabeth Boris, director of the Urban Institute’s Center on Nonprofits and Philanthropy.
Among the examples cited in the report:
* ACORN Los Angeles helped build a coalition of labor and community groups to push for increasing the state minimum wage by $1.25 to $8 an hour. The change is forecast to generate $2.65 billion in additional income in the county over four years.
* InnerCity Struggle campaigned for the construction of two new schools in East Los Angeles at a cost of $299 million. The first is set to open in fall 2010.
* The Asian Pacific American Legal Center of Southern California, the Coalition for Humane Immigrant Rights and other groups helped persuade state legislators not to abolish programs that provide food, cash and medical aid to legal immigrants.
Close to 3,000 charitable foundations are active in the county, providing grants totaling $2.1 billion in 2007, according to the report. But only a small portion support advocacy work.
“I think often that advocacy can be seen as a controversial thing,” said Alicia Lara, vice president of community investment for United Way of Greater Los Angeles, which supports some of the groups in the report. “I’m not particularly interested in funding organizations that are just doing the adversarial, stone-throwing kind of approach.”
But she said her organization does not believe it can achieve its poverty alleviation goals without addressing “the big policy issues.” Although it does much of its own advocacy work, she said it also gives 5% of its funding to community groups engaged in “problem solving.”
Karin Wang of the Asian Pacific American Legal Center hopes the report will encourage others to make advocacy part of their giving.
“Otherwise, you are not addressing the root cause of the problem,” she said.
Copyright ©2010, The Los Angeles Times
Small Businesses Need Party Favors
(Client: Credit Management Association)
Small Businesses Need Party Favors
By CHARLES CRUMPLEY 11/9/2009
Los Angeles Business Journal Staff
Big companies are starting to dance it up. Wall Street firms are almost back to prerecession levels; Goldman Sachs’ third quarter revenues doubled and earnings tripled. Even Ford and General Motors have gotten a whiff of smelling salts.
But smaller companies on Main Street? They’re not at the party.
Just last week, the Credit Management Association of Burbank released its third quarter survey of 800 credit managers across the western United States, and 64 percent said their collections of trade credit remain no better than fair. Worse, 74 percent see no change in the near future.
Trade credit is heavily used by medium and smaller companies; it is an unsecured loan that is repaid when goods are sold. So the fact that most companies are reporting that collections of such credit are only fair and that three out of four companies don’t see any improvement soon, well, that doesn’t exactly portend a quick bounce back for smaller companies.
Likewise, another report last week from SurePayroll, which provides payroll services to smaller companies, said that optimism among small business owners is “continuing to decline.” The word “continuing” stopped me. It said optimism has dropped to 50 percent – one of the lowest levels of the year.
The press release began: “While Wall Street is telling us we’re starting to recover, it seems that half of the business owners out there adamantly disagree.”
Another survey released last week, this one done by the Los Angeles County Business Federation, didn’t have much to get anyone in a party mood. Only 44 percent of local businesses thought the business outlook would improve next year, and 33 percent – one out of three – anticipate laying off workers next year. Yikes.
What’s going on here? Why are big businesses grabbing a partner and gliding out to the dance floor while small businesses still seem slumped in their chairs?
Part of the answer may be a naturally occurring phenomenon – big companies have an advantage coming out of a recession like this – but a large part of the answer may be the old story that giant companies got the lion’s share of the federal stimulus packages.
Yes, there were some goodies tossed at small businesses, but many businesses figure those bennies were too scattered and hard to get at. In the BizFed survey, local business operators said the stimulus program wasn’t well communicated, there was poor implementation and they felt small businesses were left out.
According to the survey, 91 percent of respondents said they did not qualify for stimulus money, or did not apply to get it.
This is no insignificant matter. Smaller businesses account for 90some percent of all businesses, and they account for about 100 percent of all jobs created (since big corporations specialize in cutting jobs to achieve efficiencies). And smaller companies are especially important in Los Angeles, which has a shortage of big corporations and relies to a large extent on the creative class.
Oh, sure. The economy will improve, and smaller companies will come around. Eventually.
But in the meantime, smaller and midsize company operators must feel like the folks in the lonely little house who didn’t get an invitation to the big neighborhood shindig. And there they are, noses pressed to the window, watching the big guys dance it up.
Charles Crumpley is editor of the Business Journal. He can be reached at ccrumpley@labusinessjournal.com.